ProMarkt

Agency trade-out (solvent)

Transaction background

• Germany’s second largest retailer Rewe made the decision to exit its loss-making electrical division ProMarkt.
• Following a competitive tender process, GA Europe was selected to manage the trade-out from July 2013 to December 2013.
• With a tranche of the chain’s 54 stores sold on to competitors, GA Europe took operational control of 37 stores with approximately €85m of inventory at retail.

Operational details

• GA Europe deployed their team based in Germany at ProMarkt headquarters.
• The team's retail operational expertise had an immediate and significant impact upon the chain's trading performance, increasing like-for-like sales in by up to 200%.
• Following a full pricing review, GA Europe implemented a programme of targeted markdowns, while simultaneously running a comprehensive advertising campaign across a number of  print and digital channels.
• Augment stock, bought by GA Europe, was also brought into the business in order to ensure the range remained a compelling customer proposition, particularly in the latter stages of the trade out.
• Store closures were phased over an extended trading period of 5 months in 4 waves.

Outcome

• All stores were closed with a positive result. Due to a sensitive and subtle approach by GA Europe, there were no negative claims from employees.
• ProMarkt management had a positive experience with the collaboration of GA Europe's team and the ProMarkt team, from store level to senior management. Consequently employees actively supported the transaction right through to the last trading day.
• Flexible adoption of trade out approach allowed successful navigation  of complex landlord negotiations.
• Results surpassed the client's expectations.