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Magasin Général, Tunisia’s oldest major retail brand, which this year celebrates its 140th anniversary, held a financial communication meeting at its headquarters on Friday, March 17, 2023.
During the event, General Manager Mr. Fahd Chaouch presented the Recovery Plan for 2023-2026, and finally the company’s goal is to become the favorite brand of Tunisians.
Since its creation, Magasin Général has continued to grow in strength by creating new operating models, demonstrating its resilience and regeneration capabilities.
Against this background, the company’s CEO, who has been in office since January last year, recalled that the company’s restructuring and transformation plan developed in the period 2017-2020 was affected by the economic situation and the unexpected global consequences of the coronavirus pandemic.
As a result, during the restrictions, the company’s turnover fell by 19% in 2020, a shortfall of about DT 54 million. In 2021, Magasin Général had 3,000 hours of store closures, equivalent to a shortfall of DT 65 million. In 2022, the impact of vaccination on attendance was strongly felt, not to mention the strong food inflation linked to the war in Ukraine, which led to shortages of basic products, itself linked to a surge in wild commodity prices.
“According to the CEO, these COVID years have been a learning experience to perfect the company’s business model.” It is in this sense that Magasin Général has responded with a series of actions, namely mobilizing additional resources to fight the pandemic, defending citizens’ purchasing power (reducing prices on 1,200 items) and, finally, cost control.
MG’s forecast for turnover and EBITDA
Recovery plan around four axes
For its four-year recovery plan, the new management of Magasin Général has chosen four main axes:
– Rebuild the offer that Tunisians prefer (accelerate brand development, defend purchasing power, better communicate with customers, etc.)
– Better customer experience (improved customer listening, motivated teams, managed differently by being closer to store teams)
-Digitalization (creating a digital HR experience, internal training and promotion, more agile business processes, specialized centers of excellence for transportation and logistics, new energy efficiency initiatives, etc.)
– Campus modernization (campus renovation plan and store renovation to improve shopping comfort, deployment of new e-commerce strategies, etc.)
To achieve this recovery plan, Magasin Général plans to implement an investment plan of approximately DT 114 million, including an injection of DT 52 million in cash in 2023, through a capital increase approved by the Extraordinary General Meeting of Shareholders on Friday, March 17, 2023. 5,218,750 new shares will be issued, subscribed in cash, with a rights issue ratio of 5 new shares for 11 old shares.
The new shares subscribed in cash will be issued at an issue price of 10 TD per share, i.e. the par value of 1 dinar and an issue premium of 9 dinars.
In addition to DT 82 million for the expansion and renovation of stores and warehouses, the investment plan also reserves DT 16 million for supply chain, equipment and IT, while planning DT 11 million for innovation projects and DT 5 million for energy efficiency.
Ultimately, the EGM granted the Board of Directors the necessary powers to increase capital in installments or multiple installments, determine the terms of the capital increase, notify the completion of the capital increase, and make relevant Articles of Association amendments.
Outer diameter
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