British supermarket chain J Sainsbury Plc said it was looking at its strategic options in Egypt, but denied media reports it intended to cease its operations there.
Egypt's business newspaper al-Alam al-Youm on Monday quoted Amr Nasharti, chairman of Edge, Sainsbury's local partner, as saying the company planned to quit within three months.
Lindsay Muir, spokeswoman for Sainsbury's UK, denied the reports, but said the company was reviewing its strategic options in Egypt. Neither Nasharti nor Sainsbury's Egypt officials could immediately be reached for comment.
Sainsbury's head office denied reports they would make a press statement on Wednesday. Sainsbury's Egypt generated an operating loss of 10.2 million pounds ($14.75 million) on sales of 40.5 million pounds in the first half of 2000, it said in a statement last month.
It blamed the higher than expected losses on delayed store openings, local licensing difficulties and a deterioration in the trading environment in the region. The company said it was cutting back its development programme in Egypt.
The bleaker business outlook contrasts with optimism expressed by John Rowe, chief executive officer of Sainsbury's Egypt, in February. “Originally, we thought it would take five years before we made much in the way of profits, but we are way ahead of our original plan,” he told Reuters at the time.
Rowe had said Sainsbury's intended to use Egypt as a launchpad to other Middle East markets. Now the firm says it aims to reduce its financial exposure in the region. When Sainsbury's opened its high-profile supermarkets in Egypt early this year amid opposition from local traders, a rumour spread that the British company was Jewish-owned.
The chain suffered vandalism at its stores in mid-October during student protests at Israeli suppression of Palestinian protests in the West Bank and Gaza Strip.
Some Egyptians called for a boycott of US and Israeli products to protest against the clashes, in which at least 310 people, mostly Palestinians have been killed.
This article was first published by Reuters on 11 December 2000