Metcash to close 15 stores and slash 478 jobs

Metcash (ASX: MTS) has announced it will cut 478 jobs and close 15 stores after completing a strategic review.

The grocery wholesaler/retailer will also take book charges and asset write-downs of more than $100 million.

Metcash requested a trading halt last Friday to consider management recommendations which could result in the writing off worthless goodwill, known as impairment charges.

CEO Andrew Reitzer says 15 Campbells Cash and Carry branches will be closed, resulting in the loss of 315 jobs. A further 163 jobs will be slashed from corporate offices as a result of “ongoing difficult trading conditions”.

The company will merge several operations to cut duplication and improve efficiency.

“We will incur a one-off restructuring charge of $34-$43 million which will result in an improved operating income of $25-$30 million for FY13 and a further $10-$15 million per annum for FY14,” Reitzer says.

Metcash will also sell its specialist food service business, Foodlink, to Bidvest Australia for an undisclosed amount.

“The 90 staff currently employed by Foodlink will be offered employment by Bidvest as part of the sale agreement,” Reitzer says.

As at 10.12am Metcash shares were trading down 3% to $4.170.