Ermes Department Stores Plc officially announced the completion of the sale of ERA Department Stores to Gencom Ltd., marking a key milestone in its restructuring strategy and focus on promising areas. On May 9, 2025, the board of directors made the decision to proceed with the transaction, pending the approval of the Cyprus Competition Commission and the fulfillment of a number of additional conditions.
Liabilities, staff and bonus programme are transferred to the new owner
Gencom Ltd. assumed all outstanding obligations to suppliers for the spring-summer 2025 season, totaling approximately €4.5 million. All department store personnel, along with equipment, furniture, inventory, and the UNIQUE loyalty program, have also been transferred to the buyer's new staff. Ermes will continue to provide Gencom Ltd with support on a paid basis until the end of 2025.
Reasons for the sale and financial results
Ermes has been operating in retail and wholesale since 2002 but faced losses from its department stores. By the end of 2024, the losses had amounted to €1.3 million. To break even, significant investments in infrastructure and an increase in working capital would be required.
Therefore, the board of directors recognized the transaction as economically justified and profitable. They noted that it would allow the company to eliminate future liabilities and focus on profitable areas. No external expert assessment was conducted, and the transaction does not affect the interests of "related parties" under Cypriot law.
Financial Effect and a New Stage of Development
The transaction will enable Ermes to record a net accounting profit of €1 million, primarily due to the revision of reserves in accordance with IFRS 16 — Leases. The company believes that selling the ERA department store chain will strengthen its financial position and create opportunities for developing other brands within the group.