3 months ago
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Derrimon Trading Company Limited will be exporting the Sampars brand to New York, where its two American grocery businesses are currently shuttered amid repairs, and have become a drag on its bottom line.
The Jamaican company plans to rebrand its Food Saver and Good Food for Less retail operations, saying the Sampars name has better name recognition among its target market.
The businesses were forced to closed due to flood damage that resulted in water intrusion, the threat of mould infestation and spoilage. CEO and Chairman Derrick Cotterell said the operations suffered the flood damage amid heavy rains while the premises owner was effecting roof repairs.
The repairs “led to a larger issue, where they had to effectively change the whole roof, and we just decided to use the opportunity to do a new buildout,” Cotterell said in an interview with the Financial Gleaner from New York.
“When we reopen, it will be rebranded to Sampars New York,” he said, adding that the names Food Saver and Good Food for Less do not mean as much to the diaspora.
“They’re familiar with the name through online shopping and so on, and we were going to do it anyway, so we just took the opportunity to make the change and reopen afresh,” he said.
Cotterell expects to spend “well in excess of US$2 million” by the time the grocery stores are back in business. The operations are insured, and loss adjusters are currently doing their assessments, he added.
The stores, closed since March 22, are expected to reopen by October 15. That means the Americans grocery operations, which are earning no revenue at present but still have expenses that have to be covered, will continue to drag down Derrimon’s bottom line for this quarter, ending September.
“It’s three months of not having Food Saver; that’s a US$30-million-per-year operation that we’re talking about,” said Cotterell. “There was no revenue and continued expenses,” he said, inclusive of leases, utilities, worker compensation, and other obligations.
Derrimon Trading operates a range of businesses in food manufacturing, grocery retail and consumer products distribution, as well as a pallet-making business.
Sampars Cash and Carry is its flagship retail grocery business for bargain shoppers, with various outlets across Jamaica and an online shopping platform. More recently, Derrimon has added other grocery brands to its portfolio, including upmarket Select Grocers, and the American outlets that are managed through Marnock LLC and Marnock Retail LLC.
For the second quarter ended June, the Derrimon Group generated revenue of $4.25 billion, reflecting a seven per cent decline from the $4.58 billion reported in the similar period in 2023.
Derrimon’s wholesale and retail business segment recorded a 20 per cent revenue increase, from $1.87 billion to $2.24 billion, growth that was attributed to improved sales for both Sampars and Select Grocers, supported by the implementation of a new IT platform, which “enhanced the customer experience and reliably informed purchasing decisions,” Derrimon said.
The commissioning of the new IT platform came in the aftermath of a ransomware attack in September 2023. At that time the company said it quickly addressed the issue and did system upgrades.
The company’s other operations segments experienced a near 52 per cent drop in revenue, falling from $1.54 billion to $744.35 million.
Among the manufacturing operations, food flavour company Caribbean Flavours & Fragrances Limited and pallet maker Woodcats International Limited reported revenue growth due to increased sales volumes in Jamaica, and Spicy Hill Farms also saw improved sales. However, meat processor Arosa experienced a decline in sales due to major equipment failures, which hindered its ability to fulfil orders. Its sales also suffered from a slight contraction in the tourism segment, the company said in its second-quarter financial report.
The distribution segment saw a nearly eight per cent revenue increase, rising from $1.17 billion to $1.26 billion, driven by the performance of proprietary brands Delect, Refresh, Gentle and Spicy Hill. Cotterell says there are planned additions to the product ranges for the brands to further boost their performance.
“We continue to do brand line extension. This quarter we’ll introduce Delect Ginger Concentrate, Delect Lime Juice, Delect Syrup, Delect Curry, and Spicy Hill products, among others,” Cotterell said.
Still, given the drag elsewhere in the group, the Derrimon chairman said revenue is not projected to substantially improve until the first quarter of next near.
English (US) ·