COLES boss admits rebadging plan failed

The chief executive of Coles Group in Australia, John Fletcher, yesterday admitted that his plan to lift profits and sales by rebadging Kmart and Bi-Lo stores had failed. However, Mr Fletcher said he had no intention of resigning, despite his prediction that the situation was likely to deteriorate. "It's going to get tougher before it gets better," he said. Yesterday's results showed that more than half of all Bi-Lo stores converted to the Coles brand were trading no better under their new livery, while Kmart had gone backwards. Kmart sales were down 22%, suffering what Mr Fletcher described as the "pain" of transformation. While chairman Rick Allert yesterday formally announced the retailer's plans for a break-up or sale of the business, he backed down on reported attempts to limit the number of bidders allowed to group in a consortium. Up to six bidders will now be allowed, an increase from previous reports of four. Current names include KKR, the Carlyle Group, CVC, Blackstone Group, Texas Pacific and Bain Capital. Mr Allert refused to give any details of discussions. "We are not going to sell it for less than full value," he said. The company has declined to put a value on each of its individual businesses, but analysts have valued the supermarkets, liquor and Kmart business at AUD15 billion (USD11.7 billion), Target at AUD3.5 billion (USD2.7 billion) and Officeworks at AUD1.1 billion (USD863.9 million).