The chain of supermarkets DIA could be closing up to 300 stores in Spain due to financial crisis. Serious economic issues in the previous months has led to a crash in their group shares which has plummeted more than 80 per cent to under €0.70. Their net debt rose from €945.4m at the end of 2017 to €1.45bn at the end of last year. The results of this is the closure of almost 300 stores and plans to lay off up to 2100 employees.
The company reported that it had lost €325.6m in 2018, down from a profit of €101.2m the previous year. Net sales dropped by 11.3%. With its chief executive and chairwoman resigning, the company faces its most turbulent year since its founding more than 40 years ago. However, Russian tycoon Mikhail Fridman has stepped in and has controlling interest of DIA. Fridman had a 29 per cent stake in DIA before the crisis and offered to buy DIA in a deal that would give the chain an equity value of €417m.
The objective of the company’s recently renewed management headed by the Russian investor Mikhail Fridman, is to focus on the stores and formats that are more profitable and beneficial such as DIA & Go or La Plaza de Day, and they will be closing down stores which are not. This plan for the transformation and modernization of the company is expected to be executed within five years, although the new management team has already warned and explained that the results will not be seen even within the next couple of years.