The chain lost NIS 100 million last year. The loss has caused a legal dispute between Metro and Borowitz-Rosen.
Sources inform "Globes" that the Club Market chain has fired 400 employees since the beginning of the year, 7% of its workforce, and will probably fire a similar number as part of its streamlining plan.
The sources also said the chain lost NIS 100 million in 2001, the same as in 2000. Last year's loss was attributed mostly to one-time writeoffs in the fourth quarter, during which control of the chain passed to the Borowitz-Rosen group.
The writeoffs, which were implemented by the chain's new management, are currently the source of a dispute between the Borowitz-Rosen and Metro of South Africa, which sold the controlling interest. At the beginning of the week, the new controlling shareholders filed a petition for a restraining order against transfer of the remaining $7.5 million payment (10% of the total sale price) to Metro. The money was deposited with a trustee and was due to be paid today.
The court petition alleged that the reports presented by Metro and outgoing Club Market CEO Doron Kashuv did not include several allowances the chain should have made for the period in question. According to the report for the first half of 2001, Club Market lost only NIS 21 million. A hearing in the presence of the parties will take place next Sunday.
Published by Globes [online] - www.globes.co.il - on May 22, 2002