Distribution sell-off made good sense says Weitnauer chairman

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This month's sale of Weitnauer's distribution division to a management team will allow the company's retail operation to flourish, according to Weitnauer chairman and ceo Fritz Kohli.

Weitnauer Distribution chief operating officer René Hagen is forming a new company which will begin operations in January. Kohli told DFNI that this was the final step in his drive to bring complete transparency to the company.

Two years ago, the retail and distribution divisions were separated because of internal conflicts and because other retailers were resistant to buying wholesale goods from a rival operator. "When René Hagen approached me in Spring about a management buy-out as a solution, I said 'yes"," said Kohli. "Why? Because it would free all conflicts. And we could phase out the distribution without disrupting relationships with suppliers."

Kohli admits there are profitable elements of the distribution arm that will have to be compensated by rationalisation elsewhere. Weitnauer will retain its distribution mandate though from the leading tobacco houses, as Hagen's new business will focus on fragrances and cosmetics, confectionery, gifts and other items.

Kohli said that a public float remained one of the company's options. But he emphasised that no decision had been taken on either a float or even an ultimate sale. "We are bringing this company to a standard where our shareholders have more options. There is no plan now to sell off the company but if you manage a company you have to manage it for the shareholders and you have to make sure they have options for whenever they want to do something."