6 Jul 2011

AFR to sell or close rural stores

2:02 pm on 6 July 2011

Allied Farmers Rural plans to sell or close 11 retail stores.

The struggling rural supplies company says selling the division will increase its profitability.

Three other stores have been closed since March. The properties in Kaponga, Patea and Te Kuiti have since been sold

Chief executive Steve Morrison says he is taking the company back to its roots, to focus on the profitable livestock business.

Mr Morrison says Allied Farmers Rural has started negotiating with potential buyers for the stores, which trade as Taranaki Farmers and King Country Farmers, with almost 50 employees.

He told Morning Report that Allied Farmers hopes to sell some of the stores in Taranaki as a going concern. He hopes to have final decisions made in July.

The stores were started by farmers almost 100 years ago.

However, the company's share price has collapsed to less than 1 cent each and it is battling Hanover Finance, whose property assets were bought for nearly $500 million in late 2009.

Its finance arm, Allied Nationwide Finance, went into receivership last year.

Federated Farmers says the closure would be a big loss for the community, especially in small centres where it is the only rural supplies store.