RD1 to buy Allied Farmers stores

Fonterra-owned rural retailer RD1 has agreed to buy six of 11 Allied Farmers retail stores and lease another one, providing a life line to many of the 45 staff effected by Allied’s restructure.

Allied did not disclose the price of the transaction and says the aggreement is conditional on RD1 reviewing Land Information Memoranda for these stores.

The acquistions will increase RD1’s footprint to 64 outlets throughout the country. In a statement RD1 said it is buying the physical stores rather than the actual businesses and will be offering jobs to many of those affected by the Allied Farmers’ decision to sell.

Last month Allied said its rural merchandise stores were not performing and a decision had been made to divest them either by closure or sale.

RD1 will purchase the Allied stores in Manaia, Eltham, Pungarehu, Waverley, Inglewood, Piopio and Opunake and will take over the lease of the Taumarunui store.

Approximately 45 staff members are affected by Allied Farmers decision to sell Taranaki and King Country Farmers.

RD1 general manager Nick Berry says the company plans to combine staff and assets from both companies to put an RD1 store in each centre, meaning RD1 will service most of the wider Taranaki and King Country areas.

Part of the strategy includes widening RD1’s store network to service Fonterra farmers nationwide, he added.Allied has said the divestment would enable the group to “accelerate” its debt reduction programme.



As at June 30, 2011 Allied had reduced total group debt by $50 million. 

At the same time last year total debt was $112 million (less Allied Nationwide in receivership).



Allied has retired debt over the last year by selling off some of the assets it acquired from Hanover and United Finance in December 2009.



The company recently outsourced the management of the remaining Hanover loans to its former finance arm, now in the hands of receivers, and has undergone a management reshuffle with the early departure of former managing director Rob Alloway.

“We are delighted with this outcome as it enables most of our stores to continue to operate for the benefit of the local communities which they serve and of course retain staff within those communities," says Allied Farmers Rural chief executive Steve Morrison.