In Business News this week: Korean Airlines are to acquire a 44 percent stake in ČSA; Česká Spořitelna planning lay-offs despite high profits; despite efforts to find new markets, the Czech economy remains heavily dependent on export to EU states and two Prague restaurants hold onto their Michelin stars.
The Czech government this week approved the sale of a 44 percent stake in the unprofitable national carrier Czech Airlines or ČSA to Korean Airlines for 2.6 million euro or 3.4 million US dollars. Korean Airlines, which was the only bidder, has pledged to hold its minority stake in ČSA for five years, while ČSA’s majority owner -the state -has promised to refrain from making significant changes to its strategy. Korean Air will have one representative on the three-member ČSA supervisory board and according to the terms of the contract will have the right to take part in any significant decision-making concerning the company such as capital hikes or cuts and profit distribution. The contract should be signed in the second week of April.
The Czech Republic’s second biggest bank Česká Spořitelna has announced plans for lay-offs and cost-cutting measures to the tune of 2 billion crowns. The bank is preparing to lay-off 600 employees, which amounts to 6.5 percent of its staff in the coming months. The bank has also cut costs by hundreds of millions of crowns by making better price deals with key suppliers. In an interview for the business daily Hospodarské noviny the bank’s chief executive Pavel Kysilka said that in view of the fact that the Czech economy is in its longest recession on record the bank had no choice but to cut costs if it wants to maintain profitability. In 2012 the bank saw its net profit rise by 21.8 percent to a record 16.6 billion crowns. The move to cut costs is reportedly the bank’s own decision rather than that of its parent company Erste Group.
The Czech Republic’s heavy dependence on exports to EU countries is reported to have dropped moderately in 2012, going from 83 percent in the previous year to 80.8 percent. The country exported goods to the tune of 3,000 billion crowns last year, with the bulk of Czech exports going to neighbouring Germany. The Czech Trade and Industry Ministry has outlined 12 priority export destinations outside the EU, such as Brazil, China and India and is cooperating with the Foreign Ministry to help Czech exporters find a niche on new markets. Fifteen foreign trips have been planned for 2013 with this goal in mind.
Clothing and footwear retailers have plans to open dozens of new stores around the Czech Republic this year, with many of them seeking to expand to smaller towns. The Swedish clothing chain H&M, which is growing dynamically in central Europe, has plans to open six new stores in the Czech Republic and Kik will open 15 new stores this year. Shoe retailer Deichman is also planning to expand while C&A will focus on reconstructing its existing stores. CCC which currently runs 61 outlets wants to raise the number to 100.
Czech retail sales, both adjusted and non-adjusted for working days, fell by 0.5 percent year-on-year in January, compared with a drop of 4.9 percent in the previous month, the Czech Statistical Office said on Thursday. The result was affected mainly by lower sales in the automotive segment, while a growth in the retail trade segment moderated the fall.
Two Prague restaurants – the Alcron and Degustation Boheme Bourgeoise –have held onto the Michelin stars they were first awarded last year. Both restaurants are run by Czech chefs. Alcron has been run by Roman Paulus since 2008 and La Degustation Bohême Bourgeoise by Oldřich Sahajdák since 2006. Several other restaurants were awarded in the Bib Gourmand category: SaSaZu, Le Terroir, Aromi, Divinis and Sansho.
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