STAR supermarket network to be closed?

PanARMENIAN.Net - Star supermarket chain is on the verge of closure because of unpaid debts to product vendors, well-informed circles told a PanARMENIAN.Net reporter. According to information provided, system of financial management and work with the vendors was designed for high product turnover, which couldn't be reached in current crisis situation, despite new pricing policy.



This circumstance lead to major debts to vendors most of whom intend to stop supplying goods to Star. Moreover, stringent contractual terms stipulated by Star complicate acquisition of new vendors. Risks are high for Star to remain without vendors, PanARMENIAN.Net was told.



Star did not deny the information about debts to vendors, yet called it much too exaggerated. ''The debts will be paid off within 10-15 days, and there's no question about the closure of any of our departments,'' Star Supermarket Chain Executive Director Vahan Kerobyan said.



''The debt refund was 38-40 days late, but the fact won't affect the company's profitability. In western countries outstanding indebtedness of up to 90 days is regarded as common occurrence. Our debts are proportional our purchases.''



Negotiations are held with the European Bank of Reconstruction and local banks for provision of factoring services to allow immediate debt refund to vendors at certain discounts.