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Croatia's Konzum to shut down 105 stores by end-2017

Croatia's Konzum to shut down 105 stores by end-2017 Author: Radomir Ralev

ZAGREB (Croatia), July 6 (SeeNews) - Croatian retailer Konzum, part of ailing concern Agrokor, said on Thursday it is closing down a total of 105 stores throughout Croatia by the end of the year, 22 of which will stop operating by July 30.

"These stores have been unprofitable for a long time and are likely to continue to generate losses in the future," Konzum said in a statement. "Their closure is necessary in order to achieve operational stability, as well as to preserve jobs."

A total of 870 people are employed in the stores which Konzum plans to shut. Some 80% of them are expected to be transferred to other nearby stores, however, the retailer admits it still hasn't found a solution for the remaining 20%.

"Employees for whom we do not find an acceptable solution will be taken care of in line with the collective agreement, which guarantees them severance benefits greater than those ensured by the labour act," Konzum noted.

Despite planned layoffs, Konzum also announced on Thursday it will hike the wages of 6,000 employees by 8% from August 1.

"The increase in salaries and retention of benefits will be made possible thanks to the results of the restructuring process which is currently in place in Konzum," the retailer added.

Earlier this year it emerged that Konzum's parent company Agrokor is struggling to keep liquid.

On April 10, the government named Ante Ramljak as receiver of Agrokor to lead the restructuring process and attempt to save Croatia's largest private concern under the extraordinary administration act adopted by parliament a week earlier.

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