Scottish Midland Co-operative Society (Scotmid) yesterday revealed £2million in losses for its latest financial year after being affected by the closure of some lossmaking Semi-Chem and perfume stores.
In January, the Scots retail co-operative announced plans to close six Semichem stores and six Fragrance House stores with the loss of around 90 jobs.
But the firm, Scotland’s largest independent co-operative retailer, which also operates a funeral care business, said it retained a “strong” balance sheet with assets of £90million. It added that although it was a founding stakeholder member of the troubled Co-operative Group – which recently unveiled a £2.5billion annual loss – that it was a separate and independent business.
John Brodie, chief executive of Scotmid said proposals to restructure the larger Manchester-based Co-operative Group will be revealed next month by Lord Myners, but that it was unlikely to have an impact on the way the Edinburgh-based Scotmid is governed.
He said: “We absolutely don’t want to see it [the Co-operative Group] being turned into a ‘plc’ but we accept there needs to be changed in the governance.
“Governance is something we have under review on a regular basis and Lord Myners has said that the governance of regional independent societies is totally different to the governance due to the scale and complexity of the Co-operative Group. But we are not complacent.”
The firm was hit by a £5.6million in exceptional charges stemming from a write down on the value of stores affected by closures and rationalisation charges. Its £2million loss compared to a £1.5million surplus in the year to the end 25 January on the prior year. Sales of were £431.4million were flat.
Mr Brodie said: “At this time last year I predicted a challenging year with a static marketplace and this has been the case. Consumer confidence in our core markets remains low and this is borne out by the Scottish Retail Consortium recording a like for like sales decline for 2013/14.
“In this context, Scotmid delivered an operating surplus before exceptionals of £4.5million compared to £6million last year. Like for like retail sales were ahead of the Scottish market and with the benefit of a merger with Penrith Co-operative total sales increased by £3million to £381million. Our balance sheet continues to remain strong with assets of £90million.
“We have continued our investment in business initiatives, and process developments have delivered significant benefits in the year helping to mitigate the impact of some of the external market factors.”
Scotmid had an average of 4,811 employees in 2013/14 compared to 4,832 in the previous year.