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Migros moves ahead with downsizing plans


Migros moves ahead with downsizing plans

Keystone / Michael Buholzer

Migros is slimming down further. A buyer has been found for Melectronics, the Group announced on Tuesday. The retailer also intends to divest further subsidiaries. This will result in additional redundancies.

As is well known, the retail group Migros wants to free itself from its complicated structures and become leaner. Migros has now found a buyer for Melectronics: It is selling 20 of the 37 specialist electronics stores to Mediamarkt. The remaining 17 will be closed, as Migros announced in a press release on Tuesday.

According to Migros, the acquired stores will continue to operate under the Mediamarkt brand. This rebranding will take place in stages, in parallel with the conversion measures, and should be completed by November 2024, as Mediamarkt announced on the same day.

All employees and apprentices at the acquired locations will transfer to Mediamarkt. According to social partner KV Schweiz, the electronics retailer is also taking on 18 additional apprentices from the stores that are closing.

The stores not taken over will be closed by November 2024 at the latest. Around 100 employees affected by the closures will be offered other positions within or outside of the Migros Group where possible, according to the statement. According to Migros, the takeover is currently still being examined by the Competition Commission.

In addition, the sale of Melectronics will lead to changes in around 50 larger supermarket branches. At these locations, the integrated Melectronics sales areas will be reduced to a basic range of electronics products.

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Subsidiaries to go

The retailer also wants to divest further subsidiaries. Micasa, Bike World and Do it + Garden are now also under review, as Migros announced. Group CEO Marco Irminger had previously held out the prospect of a possible sale of these chains. As long as the sales process is ongoing, all businesses will continue to operate as normal.

According to Migros, the sales process for SportX, which was initiated in February, has not yet been completed. Migros is also still looking for new owners for its travel subsidiary Hotelplan Group and the cosmetics and hygiene subsidiary Mibelle.

At the beginning of June, Migros also announced the sale of its subsidiary Misenso, which was only founded in 2020 and bundles the hearing aid and optical business, to the Austrian Neuroth Group.

Meanwhile, the future of OBI is still unclear. Migros operates ten locations of the DIY chain in Switzerland as a franchisee. A project group under the leadership of the Migros Cooperative Basel is currently working on possible future options for the franchise operation.

Industry downsizing

There was also definitive news on the planned downsizing in Industry, after rumours to this effect had already been circulating in various media in recent days. According to the announcement, Migros Industry will in future focus on its role as a producer for the Migros Group in Switzerland and on the production of private labels for third parties.

This realignment includes changes at food manufacturer Delica, milk processor Elsa Group and Migros Industrie, which operates across the board. As a result of the realignment, a reduction of around 365 jobs is unfortunately unavoidable, Migros wrote.

Brands in Germany to go

Several areas of Delica will be reduced. Abroad, Delica is exiting some brand businesses and focusing on own brands for third parties. For example, the Frey International brand and the brands for coffee beans and ground coffee in Germany will be discontinued.

As a result, Migros is talking about a total of around 415 jobs – including 50 at Fachmarkt AG, 255 at Delica, 45 at Elsa and 65 at the Migros Industry Organization – that will be lost.

They are part of the transformation of the Migros Group announced at the beginning of February, with up to 1,500 of the approximately 100,000 jobs in the entire Migros Group to be cut. In addition, up to 100 more employees could lose their jobs if no follow-up solution is found for those affected by the Melectronics closures.

According to Migros, there is a social plan to cushion the impact. Employees in Switzerland affected by the job cuts will receive individual benefits depending on their length of service and age, among other things.

Nevertheless, the announced cutbacks caused protest from the trade union Unia. Migros should invest more in its employees instead of wasting millions on McKinsey management consultants, the union wrote in a statement.

Translated by DeepL/mga

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