STAR SUPERMARKET NETWORK TO BE CLOSED?

PanARMENIAN.Net
30.03.2009 16:51 GMT+04:00

/PanARMENIAN.Net/ Star supermarket chain is on the verge of closure
because of unpaid debts to product vendors, well-informed circles
told a PanARMENIAN.Net reporter. According to information provided,
system of financial management and work with the vendors was designed
for high product turnover, which couldn't be reached in current crisis
situation, despite new pricing policy.

This circumstance lead to major debts to vendors most of whom intend
to stop supplying goods to Star. Moreover, stringent contractual terms
stipulated by Star complicate acquisition of new vendors. Risks are
high for Star to remain without vendors, PanARMENIAN.Net was told.

Star did not deny the information about debts to vendors, yet called it
much too exaggerated. "The debts will be paid off within 10-15 days,
and there's no question about the closure of any of our departments,"
Star Supermarket Chain Executive Director Vahan Kerobyan said.

"The debt refund was 38-40 days late, but the fact won't affect the
company's profitability. In western countries outstanding indebtedness
of up to 90 days is regarded as common occurrence. Our debts are
proportional our purchases."

Negotiations are held with the European Bank of Reconstruction and
local banks for provision of factoring services to allow immediate
debt refund to vendors at certain discounts.