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Jun 12, 2009
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Gruppo Coin says June like-for-like flat

By
Reuters
Published
Jun 12, 2009

By Marie-Louise Gumuchian

LONDON (Reuters) - Italian department store chain Gruppo Coin (GCN.MI) has seen flat like-for-like sales in June so far after a "big pickup" in May, Chief Executive Stefano Beraldo said.



"(June has been) basically flat ... the first two or three days were very good, then it rained so (it was) lower, so flat basically ... good considering the general environment," he told the Reuters Retail Summit in London late on Thursday 11 June.

"This is interesting as apparently the recession is less important than weather in our business."

Beraldo confirmed targets for this financial year given previously given to analysts and investors for earnings before interest, tax, depreciation and amortization (EBITDA) of 145 million euros, including "negative sales."

"The economic situation is still tough ... so I don't see any sort of end of the recession in the next six months for instance but because of what we made I believe we are in the position to confirm our target for the year," he said.

EBITDA was 133.7 million euros in financial year 2008.

Beraldo said the group, which operates under two brands -- Coin and Oviesse -- and has opened stores in eastern Europe and the Middle East, was going ahead with some 20 openings outside of Italy for this year. "It is going ahead in spite of the recession in those countries," he said.

He said Gruppo Coin was not interested in parts of German retailer Arcandor (AROG.DE), which is filing for insolvency.

"Germany is a very difficult country ... (it is) not our priority now," he said. "Unfortunately the market is giving a lot of opportunities. It doesn't mean we are ready for them."

On a possible tie-up with rival Upim, Beraldo reiterated Coin was still interested, although there were no ongoing talks.

"NOT A TIGER IN THE JUNGLE"

"We must select our targets very carefully because we are not like a tiger in the jungle," he said. "We are not interested in buying companies simply because we are a consolidator, especially out of Italy."

He said instead its expansion outside its home base would be done through joint ventures, like a recent one in India.

"India is a big market, looking for European style at Indian prices," Beraldo said.

Coin, which sells clothes, home decorations, accessories and beauty products in its stores, acquired the Melablu retail network last year, made up of 60 stores.

On Wednesday 10 June the group said first-quarter results were flat as cost cuts offset weak sales. Net profit for the quarter ended April 30 was unchanged at 800,000 euros.

Beraldo said it was hard to forecast when a recovery for the retail sector, hit hard by the global crisis, would take hold.

"It depends very much on what the government will do, institutions will do to help their respective countries to exit the recession," he said.

He said online retailing was still not a business for the group. "And I guess still not a business for Italian players."

Coin's founding generation goes back to when Vittorio Coin got a street seller's license to sell fabrics and haberdashery in 1916. The first store was opened in 1926 in Milan, selling fabrics, yarns and linen.

(For summit blog: blogs.reuters.com/summits/)

(Editing by Jon Loades-Carter)

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