THE prospective new boss of CI Traders has said there will be no job losses - in the short-term. Tony O’Neill, who will be taking the reins as chief executive if a £260m. deal goes ahead next month, said he had every intention of growing the business and running it from the shop floor up.
But, in the longer-term, he added that there could be some redundancies, although they would be ‘very small in the context of the company.’
Private equity consortium Sandpiper has agreed to pay £260m. for CI Traders, which operates Marks & Spencer, Safeway, Checkers and numerous bars, pubs and restaurants in Guernsey. It employs 3,300 staff in Jersey and Guernsey.
‘We have tried to give as much confidence as we can to employees,’ said current CI Traders chief executive officer Martin Bralsford.
‘We have obtained good undertakings from Sandpiper. These were not difficult points and they were willingly given, which is a good sign. But that is difficult to convey to people who are doing their daily job and they are going to be a bit worried.’
A number of private equity firms have recently been accused of asset-stripping by several European trade unions, which were concerned they were intent on generating bigger profits by sacking staff, selling off subsidiaries and taking on debt.
Brewin Dolphin director Toby Peatfield said private equity companies would typically inject their own management team and expertise into an acquired organisation.
‘Job losses are often talked about in this kind of situation and indeed they can occur,’ he said.
‘However, the new management won’t be afraid to create positions in order to arrive at their ideal objective.’
But Mr Peatfield believed Sandpiper would want to build on its investment.
‘Judging by the prolonged period of due diligence undertaken by this consortium, they believe they have spotted value in CI Traders and will look to unlock this over the coming years. For an indefinite period, they will refine and improve their acquisition until they feel the time is right to sell it on. Obviously they have the choice of selling the company as one lot or bit by bit.’
When asked if the consortium intended to sell on the company in a few years’ time, Mr O’Neill said it was too early to comment.
‘It’s not something we have considered. We are not buying this business to sell it on, we are buying this business to grow it.’
Article posted on 29th June, 2007 - 12.00am
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