Filenews 9 May 2025 - by Charalambos Zakos
The public company Ermes Department Stores Plc has announced the agreement for the transfer of the activity of the four ERA department stores to Gencom Ltd, based in Nicosia, for a standard price of €1, as part of a restructuring strategy and release from loss-making activities.
The agreement was approved by the Board of Directors of Ermes and is subject to approval by the Cyprus Competition Protection Commission, as well as the fulfilment of additional conditions. The transaction includes the transfer of the long-term leases of the department stores to Gencom, which also undertakes pending orders worth approximately €4.5 million. for the Spring/Summer 2025 season.
The human resources of the department stores will be transferred to the new owner, as well as the equipment, furniture and the UNIQUE customer loyalty program. The stocks that will be in the stores upon completion of the transaction will be made available to Gencom through a deposit agreement.
Ermes will continue to provide significant support services to the buyer until the end of 2025, for an agreed price.
Ermes, which has been active in retail and wholesale trade since 2002, decided to transfer as the operation of the department stores had become loss-making, with operating losses of €1.3 million for 2024. The management estimated that significant investments and increased working capital would be required to reverse the situation.
Upon completion of the transaction, Ermes expects an accounting profit of €1 million, mainly due to the reverse provision under IFRS 16 – Leases. The company did not ask for external valuation or consulting support, but deemed the price fair and reasonable in the current circumstances.
The transaction does not affect the interests of any Secretary of the issuer or "designated person" as defined by the legislation on the Cyprus Securities and Stock Exchange.
Ermes considers that the agreement will have a positive impact on its financial situation and will be beneficial for the CTC Group and its shareholders.
