RIYADH: Saudi franchise retailer Cenomi Retail plans to divest 26 non-strategic brands as part of the strategy to rationalize its brand portfolio, the company said in a Tadawul filing.
Formally known as Fawaz Abdulaziz Alhokair & Co., the Riyadh-based firm said it wants to focus on “Champion Brands” occupying the number one or two positions in their sectors.
In the first phase of its transformation program, Cenomi Retail has decided to divest three brands under Azal restaurant and Shawarma Almuhalhl for SR25 million ($6.66 million).
This comes as Cenomi Retail has completed the acquisition of 30 Subway restaurants across the Kingdom while adding directly operated stores to its sub-franchisor store footprint. The company said this strategic growth in the food and beverage sector will be furthered by 17 additional Subway locations opening in 2023 as well as 15 Cinnabon openings.
“We have made a number of well-considered transactions that fully support the ambitious transformation journey that we are taking Cenomi Retail on. This includes a stronger focus on key areas of growth, such as F&B, and our partnership to bring Subway to the Kingdom is a clear example of this in action,” said Mohamad Mourad, interim CEO, Cenomi Retail.
He added that the company is firmly focused on being the retail brand partner of choice as well as the number one retailer for consumers in the Kingdom. “We will continue to identify and work with brands that align with our strategic goals, represent a diversified mix of sectors and support the country’s own ongoing transformation.”
According to the statement, the company has already appointed advisers for the divestment process, and the brands earmarked for disposal are expected to have a revenue impact of SR288 million, with an uplift in the profitability of SR25 million accruing once the divestment program gets completed.
“This program will support the evolution of the brand portfolio. It facilitates the continued focus on bringing the most coveted winning brands to the Kingdom to meet consumer needs and support the growth of retail across the country,” the company added.
Earlier in January, to catalyze its digital transformation journey, Cenomi appointed three chief technology and information officers for Cenomi Group, Cenomi Centers and Cenomi Retail.
Binoo Joseph joined as CTIO of Cenomi Group, Lijo Kankapadan as CTIO for Cenomi Centers, and Sunil Nair took on the role of CTIO in Cenomi Retail.
