The Tribune

By NEIL HARTNELL

Tribune Business Editor

SUPER Value's owner has told Tribune Business that Abaco has proven "more resilient" to the global recession than any other Bahamas island, with his interests on the island seeing an 11 per cent increase in business year-over-year.

Arguing that Abaco stood "head and shoulders" above the rest of the Bahamas when it came to withstanding the downturn, Rupert Roberts said his partner in Price Right, Save A Lot and Maxwells, Chad Sawyer, had told him this week that the economy appeared to be "picking up".

And, while the news on US corporate earnings was not overly encouraging, the Super Value president said American consumers appeared to be spending more, something likely to translate into improved tourism numbers.

"We're up 11 per cent in Abaco," Mr Roberts told Tribune Business. "Abaco has been more resilient in the recession. We opened a new store there.

"I think the tourism figures will bear out that Abaco has done head and shoulders better than the Bahamas. We're up over there in a recession, and are continually up.

"My partner feels the economy is picking up. There's a new airport, a lot of government capital expenditure there. We almost built a new Commonwealth Bank branch there - we added on and remodelled it. There's been a lot happening in Abaco."

With his acquisition of the leasehold interests in City Markets' remaining four New Providence store sites imminent, only awaiting Shop Licence approvals, Mr Roberts told this newspaper that as a high volume, low margin business with numerous moving parts to manage, the Bahamian supermarket business was not for the faint-hearted.

Alongside staff payroll, rent, depreciation and electricity were the four costliest items when it came to running a food store.

"Those three items can run to $100,000-$150,000 a month in a big store," Mr Roberts explained of the last three factors of production. "Every month I write BEC a cheque for $250,000-$300,000 for power. But your biggest item is your payroll.

"There's no money that drops out of the sky and comes to support you. It's a very difficult business, and works only with volume - high volume, low margin. With volume you make it. There's no money falling out of the sky."

Recalling the long journey to the point where he has almost acquired the last store sites of what was once his major competitor, Mr Roberts detailed how he had been unsuccessful when City Markets was put on the market by each of the two owners prior to the Finlayson family's Trans-Island Traders.

Harking back to 2006, when Winn-Dixie placed its 78 per cent majority stake in City Markets up for sale, Mr Roberts told Tribune Business: "We were involved in this initially. We made an offer; we offered $33 million, and when it got above that, we walked away, saying we'd get it second time around."

The BSL Holdings consortium, featuring Barbados Shipping & Trading, which had the largest stake and management rights, won the bidding with a $54 million offer. The remaining 60 per cent of the group comprised Bahamian investors, including the hotel industry pension funds, RoyalFidelity and others, but their investment and ownership proved disastrous, wiping out all shareholder value as collective losses over three-four years reached $28 million.

Trinidadian conglomerate, Neal & Massey, which had acquired Barbados Shipping & Trading, took over as management partner but could not turn City Markets around.

"Neal & Massy tried to sell it to me for $10 million and I said: 'No'. They then turned around and sold it to Mark [Finlayson] and his family for $1," Mr Roberts, recalling the events that led to the current proposed deal.

"I was the former general manager at City Markets 50 years go. I know City Markets. I built them. The Barbadians and Trinidadians destroyed that company.

"Mark couldn't possibly make that go from where they left it. He had nothing but broken down refrigeration. The engine couldn't run. Every time they stocked those stores with perishables, the refrigeration broke down. Without any perishables, customers kept losing confidence."

Mr Roberts said City Markets had required a major multi-million dollar investment in its stores and equipment to help turn the operation around. The Finlayson family to-date has invested between $19-$20 million in it, with little success, as the losses have kept mounting on top of the $16 million-plus before exceptionals incurred for the year to end-June 2011.

The Super Value owner revealed to Tribune Business that talks over his company's potential takeover of City Markets began "the Saturday before last" at a meeting involving himself and daughter, Candy, on one side, and Finlayson family members Rae Finlayson and Nikki Boeuf on the other.

"They asked if we were serious, we said we were serious, and once they recognised that it went like a dream," Mr Roberts told this newspaper. When Mark and myself met it was so co-operative and cordial. We looked at the stores and recognised the problems."

Asked about the overall implications of the deal, Mr Roberts added: "It's going to be good for us, good for Mark and good for the country."