Deka deal canned

Deka's owner, Perth-based Foodland (NZSE: FAL), says the proposed sale of a number of the stores to the Number One Retail Group will now not go ahead.

Foodland announced in March it would wind down the underperforming Deka brand, although a number of stores would be switched to the Farmers chain.

The Number One Retail Group, run by several former employees of retail leader The Warehouse, had been in discussions to pick up some of the Deka stores.

However the chief executive of Foodland's Farmers-Deka business in New Zealand, Nick Lowe, says the potential purchaser has withdrawn from the transactions.

"I am extremely disappointed by this latest turn of events as there was every reason to believe a sale would be successfully concluded.

"We had genuinely hoped to secure a positive future for all of the Deka team."

Mr Lowe says Deka stores will continue to trade as normal until revised closure and store rebranding plans are finalised.

Six former Deka stores are now trading as Farmers and further stores will be converted over the next three months.

Foodland has already provided for write downs of more than $20 million associated with the planned closures.

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