Glen Khan: ‘What we did was sell the Fogarty’s building and lease it back… this is what they call financial engineering—how you release capital to one of your major assets so that you can put it back into the business’
The management of Fogarty’s Department Store yesterday assured that while its Water Street building has been sold it was part of a financial strategy and the company would not be affected.
“What we did was sell the Fogarty’s building and lease it back… this is what they call financial engineering—how you release capital to one of your major assets so that you can put it back into the business… It’s [Fogarty’s] staying in the same building, it’s expanding in the same building but it doesn’t own the building,” Glen Khan, Chairman of the Laparkan Group of Companies, which counts William Fogarty Limited among its holdings, told a press conference yesterday.
Khan said that the building was “sold and then leased” as part of a visionary financial undertaking of his company.
Stabroek News on November 27th reported that Fogarty’s Water Street building and its Norton Street bond were sold, with the reported buyer being the Trinidad-based American Stores Ltd, which has started its regional expansion here.
Khan expressed dissatisfaction with the Stabroek News report and was very vocal about the headline ‘Fogarty’s sold,’ saying that it contributed to the misconception that it was the company that was sold. “What we did was sell the Fogarty’s building and leased it back… We are looking at not only how we consolidate our business but how we expand,” he said.
He also dismissed reports that the buildings were sold to the American Stores franchise, informing that American Stores had a rental agreement with the buildings’ new owners.
Stabroek News had made efforts to contact management of Fogarty’s on the details of the sale but was told that no one authorised to speak on behalf of the company was at the local office at the time.
Khan would not disclose the identity of the new owners. He said that since there is only a sale of agreement and the sale documentation was not yet completed, he felt it was not the right time to disclose who the new owners of the building will be. “Here again you are going into confidential information… I am not at liberty to have discussions with arrangements that we have got with a buyer. They have to give me approval to disclose who they are, disclose pricing and things like that and these are confidential information,” he said.
Paperwork for the finalization of sale should be finished by February, he said.
Khan did assert that the building will still be named the William Fogarty’s building after its original owner, which it has kept for decades. He added that the Fogarty’s Water Street building is an “iconic building” which would be retained by a “Guyanese group.”
He also said that Fogarty’s businesses deemed most profitable, such as its financial services, garment sales and cafeteria will still remain in the building. “What we will have here is what we need…. In a lot of cases, the challenge has always been to modernise and stock Fogarty’s to its core level. That needs to be done and that is why we came up with a solution that would change the arrangement as we go forward,” he said.
None of the company’s 135 employees will be out of a job as the Chairman assured that what the public would see is more persons being employed as the strategic modernisation and expansion moves were made. “Generally, we don’t see any changes in our staff levels and we have had that discussion with the union because Fogarty’s is unionised and we have had extensive discussions with the union,” he noted.
He said that his company was growing robustly and the move to sell and lease was a financial strategy that would assist in maintaining fiscal growth under its new CEO Hussein Haniff.
The William Fogarty’s Store is said to now house departments that include a supermarket, pharmacy, gift shop, jewellery store, cafeteria, furniture store, travel agency and stationery store.