Cenomi Retail to divest up to 18 more brands this year

Cenomi Retail are planning to wrap up the sale of an additional 18 brand assets this year as it pushes forward with a rationalization strategy, it said in a statement yesterday. It's the third phase of a program that kicked off last year as Saudi’s largest franchise retailer looks to optimize operations by downsizing its brand portfolio and focusing on its most successful names.

What we know: The third phase, which will see the sale or exit of “non-core brands,” will include Cenomi Retail’s Apple premium reseller Aleph, makeup brand KIKO, sports retailer Decathlon, and variety store chain Flying Tiger Copenhagen, among others. The retail giant hopes to rake in SAR 650 mn in proceeds, according to the statement. The completion of Cenomi Retail’s program will shrink its core portfolio to 13 brands from an earlier 75 with its store footprint down to 367 from a current 1.05k.

Cenomi said it will prioritize top-tier fashion and food and beverages brands including Inditex brands such as Zara. The retailer has plans to boost its offerings of Cinnabon, Subway and Jamba.

We knew this was happening: Cenomi Retail’s BoD approved this week a program that it said would include the sale of an additional 24 brands under its turnaround strategy without providing further details. The announcement came as the BoD recommended lowering the company’s capital to SAR 100 mn as part of a capital restructuring to “offset accumulated losses” which came in at SAR 1.1 bn in FY 2023.

ICYMI- Cenomi Retail said earlier this week that it is selling more franchise rights to Abdullah Al Othaim Fashion, adding five brands to a sale agreement it inked back in December for additional consideration of SAR 219 mn. The move comes a few months after it wrapped up a strategic sale of its fashion subsidiary Innovative Outfit Trading along with franchise rights for 16 brands to Al Othaim. The transactions are valued at an aggregate price of SAR 360 mn, including estimated inventory consideration, according to the retailer.

Cenomi Retail is the largest franchise retailer in the Kingdom and the only listed business of its type in the region. The retailer is currently active in 1k stores across 326 malls in nine countries, with brands spanning womenswear, menswear, kids and baby, department stores, shoes and accessories and cosmetics. This is in addition to operating a number of restaurants and coffee shops including Subway and Cinnabon.