Jamaican teas sells Montego Bay supermarket
Jamaican Teas Limited has sold its stake in the Bay City Supermarket, based in Montego Bay, marking its second disposal of a retail holding this month.
The beverage company is also selling its Shoppers Delite operation in Westmoreland.
Both transactions are due to close by October 31, ahead of the previously projected 2017 disposal of the Montego Bay holding.
Bay City Supermarket is operated by Bay City Foods Limited, in which Jamaican Teas has 49 per cent ownership. Its partner in the business Amalgamated Distributors Limited also owns 49 per cent, while John Mahood and Marcos Dabdoub hold one per cent each, according to Companies Office records.
The company is hoping to eventually improve its operating results by cutting the loss-making entities.
Shedding the supermarkets will allow for focus on its other businesses of manufacturing and real estate, it said.
Jamaican Teas is primarily a beverage company, but its holdings also include grocery assets as well as real estate.
SHOPPERS DELITE STAYS
Its other Shoppers Delite holding in Kingston has consistently performed for the company and will be kept amid the reshaping of Jamaican Teas' core focus, CEO John Mahfood previously told Gleaner Business.
Since the lease on the Montego Bay supermarket would have expired in November this year, the company had set a target for wrapping up the sale by early 2017, Mahfood said on Tuesday.
"But we didn't know that things would work out as quickly as they did. So as it turns out the completion date for both the Savanna-la-Mar and Montego Bay store is this weekend," he said.
He did not disclose the name of the buyer.
As with the Shoppers Delite store, the sale includes the fixed assets and the inventory, which will be valued at the end of the month.
"When that is counted, then we'll know," he said, in reference to the final sale price for the supermarket operation. "It's not a big amount compared to our assets."
Jamaican Teas does not expect to make a loss on any of the disposals.
"The selling price will cover the investment that we have in the stores," Mahfood said.
Bay City Supermarket was bought six years ago.
Together the outlets ran roughly $20 million a year in losses, "so in that regard, we should be better off", said the Jamaican Teas CEO.