Rautakirja to Sell Kiosks in the Czech Republic to Hachette

Rautakirja, part of the SanomaWSOY Group, will sell its 50% share of the CZ Retail a.s., a Czech kiosk operator, to its French partner Hachette Distribution Services SA (HDS). The gain on the sale of asset will amount to some EUR 5 million. The deal is subject to the approval of the Czech competition authorities.

Rautakirja and HDS founded at the end of 2002 the jointly- and equally-owned company, which started operations at the beginning of 2003. ? The joint operation did not fully achieve the goals Rautakirja had set for it so we have decided, in good spirit, that it is best that we will sell our share to HDS, says Erkki Järvinen, President of Rautakirja. According to Järvinen, the exit from the Czech market does not mean a change in Rautakirja's strategy to gain growth in Russia and CEE countries.

CZ Retail employed some 48 persons and its net sales in 2004 totalled EUR 23.8 million, of which Rautakirja consolidated some EUR 8.4 million. In total, the company has 159 kiosks in the Czech republic, of which 29 are operated under Rautakirja's R-kiosk brand, 76 under Hachette's Relay brand, and 54 are non-branded kiosks, mainly operating as newspaper and magazine stands. All kiosks are operated by franchisees. After the divestment, R-kiosk brand will no longer be seen on the Czech market.

Following the deal, Rautakirja is the market leader in kiosk operations in Finland, Estonia, Latvia, and Lithuania. In addition, the press distribution has also expanded to Romania and Russia.