Bearish Spanish Outlook Means Eroski May Need To Sell More Assets

The local Spanish media has reported that Basque-based retailer Eroski is selling a network of seven hypermarkets in Madrid to French retail group Leclerc. The move is driven by Eroski's need to cut debts, which ballooned following the acquisition of supermarket chain Caprabo for EUR1.1bn in 2007. This acquisition came shortly before the Spanish economy was hit hard by the global economic downturn and subsequent austerity measures and suggests that Eroski may be struggling to come to terms with the current operating environment ? an assertion also supported by the company's recent financial results.

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