Restructuring costs at Spar, the German food retailer owned by France's Intermarché group, pushed the group further into the red in 2002.
Net losses for the year reached €379.4 million, the company said, although it declined to give a comparative figure for 2001. Restructuring costs were €272 million.
There was some good news, however, with underlying earnings improving in spite of tough economic conditions: operating losses were reduced by €13.5 million to €153.8 million. Sales, on the other hand, were down 1.8 per cent to €7.3 billion.
Restructuring will continue this year, the company said, with around 100 stores likely to close and a further 170 set to be sold off by the middle of 2004. The company will continue to invest in its Netto discount chain - whose good performance was one of the few positive highlights of 2002 - and will continue to supply a large number of independent retailers.
The logic of Intermarché's acquisition of Spar still remains unclear, with the company's management of its foreign units seemingly in stark contrast to the successes of Carrefour, Casino or Auchan.
Carrefour in particular has been successful in generating growth from the convenience store and discount store sectors - two areas where Spar is traditionally strong - and Intermarché will undoubtedly take heart from the growth of the Netto discount stores during 2002.
But the cost of restructuring the Spar business is still taking its toll on profits, and it is likely to be some time before Intermarché's 85 per cent stake in the group - which was saved from bankruptcy in May after an agreement with its creditor banks - begins to look like a good investment.