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Gendis Inc. Withdraws Financial Support for MMG Management Group MMG closes Montreal Head Office.

MONTREAL--(BUSINESS WIRE)--Feb. 11, 1997--

Places 169 Store Chain into Bankruptcy SAAN Stores of Winnipeg

Bids for 89 of the Outlets

GENDIS INC. (TSE GSA.A. GDS.B., OTC Bulletin Board GNDAF.) Greenberg Stores Limited, operating as MMG of Montreal, has voluntarily placed its 169-store retail chain into bankruptcy after its ultimate parent company, Gendis Inc. of Winnipeg, announced today that it was withdrawing financial support.

The move by MMG is part of an overall rationalization by Gendis of its retail operations which include MMG and SAAN Stores Ltd, a 253-store retail chain based in Winnipeg. The action does not affect any of the existing 227 SAAN stores or any of the 26 Red Apple Stores operated by SAAN.

MMG operates junior department and family clothing stores in all 10 provinces under the Metropolitan, Met, MetMart, Greenberg and Red Apple/Pomme Rouge banners.

Saan, which was founded in 1947, operates family clothing stores in Ontario and provinces west under the Saan and Red Apple banners.

During the last four years, MMG has incurred substantial losses due largely to declining sales revenues and a high cost base. Sales revenues have suffered primarily as a result of increased competition from other chains and decreased consumer spending according to G. Allan Mackenzie, president and chief operating officer of Gendis.

"MMG has made every attempt to stem the losses including closing some of its unprofitable stores, cutting costs and refining formats and merchandise mix." said MacKenzie. "However, its sales volumes are not sufficient to support its infrastructure and we at Gendis ultimately came to the conclusion that MMG in its current form is simply not viable."

As part of the intended rationalization of Gendis' retail operations, SAAN made a bid to acquire 89 of MMG's stores to be operated under the SAAN and Red Apple/Pomme Rouge names.

"As MMG's banker, Gendis has funded MMG's operating losses. As a result, Gendis is the largest creditor affected by this restructuring, said Patrick Matthews, vice-president of finance for Gendis.

MMG's head office in Montreal will ultimately be closed and SAAN's revitalized network of 342 stores will be run from SAAN's head office in Winnipeg, according to Bob Whitney, president and chief operating officer of SAAN.

"The Montreal MMG head office employs 322 people and we have offered employment in Winnipeg to approximately 60 of the staff," said Whitney. "A total of 1,847 employees will retain their jobs in the 89 MMG stores purchased by SAAN."

According to Stan Wener, senior vice-president of Caron Belanger Ernst & Young Inc., the trustee in bankruptcy of MMG, with few exceptions, the remaining 80 stores not being acquired by SAAN are unprofitable and will likely ultimately be closed after inventories are sold by way of clearance sales. This will affect approximately 1,200 full and part-time employees in these stores.

In addition, 30 employees of Gendis Business Services of Montreal will also be affected by today's announcement, according to MacKenzie.

"We regret the impact this move will have on our employees across Canada who will lose their jobs." said MacKenzie. "We appreciated their efforts over the years and sincerely thank them for their service."

"These are challenging times for retailers and we believe our best opportunity for success lies in paring down to a reduced number of MMG stores operating under the profitable SAAN and Red Apple/Pomme Rouge brand names. We will also cut costs by operating from one base in Winnipeg".

"We recently informed our shareholders that the improvement of our retail operations was a top priority and we believe today's rationalization of our retail chains provides the solution," said MacKenzie.

The new 342-Saan store chain will employ over 4,700 people and offer Canadians in 275 urban and rural communities from coast to coast a strong merchandise selection, convenience and good value. The chain is expected to generate sales of over $400 million."

Gendis' 1996 sales were $529 million. In addition to its role as a retailer, Gendis is also involved in real estate management and development as well as oil and gas exploration and development through its associated companies, Chauvco Resources Ltd. of Calgary and Tundra Oil and Gas Ltd. of Winnipeg.

A complete list of the 89 locations that SAAN Stores has bid to acquire and the remaining 80 MMG Stores under Trustees' direction accompanies this release.

Gendis Inc. - Winnipeg Allan MacKenzie President and C.O.O. (204)474-5200 Mr. MacKenzie is available for interviews from 12 noon-3 p.m. E.S.T.

SAAN - Montreal Bob Whitney President and C.O.O. (514)638-4461

Mr. Whitney is available for interviews in French or English from 12 noon-3:00 p.m. at the St. Constant Greenberg Store -0-
 89 STORES WHICH SAAN HAS BID TO ACQUIRE

PROVINCE TYPE OF STORE
________ _____________


BRITISH COLUMBIA
________________

Kelowna Met
Quesnel Met
Mission Met

ALBERTA
_______

Calgary Met
St-Paul Met
Spruce Grove Met
Airdrie Met
Barrhead Met
Peace River Met

SASKATCHEWAN
____________

Melfort Met
Humboldt Met
Nipawin MetMart

MANITOBA
________

Winnipeg Met
The Pas Met
Selkirk Met
Steinbach Met
Winkler Met

ONTARIO
_______

Chelmsford Red Apple
Elliot Lake Met
Parry Sound Met
Hawkesbury Met
Pembroke Met
Espanola Met
Araprior Met
Napanee Met
Kirkland Lake Met
Aurora Met
Amherstburg Met
Bowmanville Met
Chelmsford Met
Val Caron Met
Fort Frances Met

QUEBEC
______

Chandler Met
Gaspe Met
Charlebourg Met
Grande-Mere Met
Joliette Met
Roberval Met
St-Georges de Beaue Greenberg
La Sarre Met
Matane Met
Amos Met
Ville Marie Met
La Sarre Greenberg
Chambly Met
Chibougameau Met
Louiseville Met
Iles-de-la-Madeleine Met
Cowanisville Met
La-Malbaie Met
Mont-Laurier Met
Dolbeau Met
Paspebiac Met
St-Felicien Met
St-Raymond-Port-Neuf Met
St-Constant Greenberg
St-Jovite Greenberg
Fermont Met
Coaticook Greenberg
Senneterre Met
Verdun Red Apple
Sherbrooke Red Apple

NEW BRUNSWICK
_____________

Riverview Met
Edmundston Met
Newcastle Met
Woodstock Met
Tracadie Met
St-Stephen Met
Caraquet Met
Dalhousie Met
Grand Falls Met
Shippagan Met
Shediae Met
Bouctouche Met
Edmundston Red Apple


NOVA SCOTIA
___________

Glace Bay Met
Digby Met
Antigonish Met
Windsor Met
Antigonish Red Apple
North Sydney Red Apple
Sydney Red Apple
Kentville Red Apple
Yarmouth Red Apple
Liverpool Red Apple

PRINCE EDWARD ISLAND
____________________

Summerside Met
Charlottetown Red Apple

NEWFOUNDLAND
____________

Gander Met
Wabush Met


 80 STORES TO BE CLOSED


PROVINCE TYPE OF STORE PROVINCE TYPE OF STORE

BRITISH COLUMBIA Quebec - con't

Castlegar MetMart Ste-Adele Greenberg
 Roberval Greenberg
ALBERTA Port-Cartier Met
 Thetford Mines Greenberg
Leduc Met Acton-Vale Greenberg
Drayton Valley MetMart Ste-Julie Greenberg
Whitecourt Met Forestville Met
 New-Richmond Red Apple
 Malartic Greenberg
SASKATCHEWAN Lebel-sur
 Quevillon Met
North Battleford MetMart East Angus Greenberg
 Mont-Laurier Greenberg
MANITOBA Lac-Etchemin Red Apple
 Montreal-Nord Greenberg
Swan River MetMart Cap-Rouge Greenberg
Dauphin Met La-Tuque Greenberg
 Trois-Rivieres Greenberg
ONTARIO Vaudreuil Red Apple
 Ville-Marie Red Apple
Prescott Red Apple La-Tuque Red Apple
Leamington MetMart Ste-Anne-
Welland (x2) MetMart des-Monts Red Apple
Sault Ste-Marie Met Trois-Rivieres Red Apple
Marathon MetMart Cabano Red Apple
Keswick MetMart Mont-Joli Red Apple
Red Lake Met Ste-Hyacinthe Red Apple
 Quebec Met
QUEBEC Levis Greenberg
 Baie-Comeau Red Apple
St-Anne-de Beaupre Greenberg Mont-Joli Met
St-Bruno Greenberg New-Richmond MetMart
St-Gerome Greenberg Sept-Iles Met
Rock Forest Greenberg Sept-Iles Greenberg
Boulevard MTL Greenberg
Normandie MTL Red Apple NEW BRUNSWICK
Val Belair Greenberg
Ste-Therese Red Apple Tracadie Greenberg
Point-Aux Trembles Red Apple Caraquet Greenberg
Montmagny Greenberg Atholville Greenberg
Beauport Greenberg Shippagan Greenberg
La-Pocatiere Greenberg Beresford Red Apple
7017 St-Hubert St. Mt. Met Quispamsis Greenberg
Lachute Greenberg Shediac Greenberg
Laval Greenberg Moncton Greenberg
Neufchate Greenberg Bathurst Met
Vaudreuil Greenberg Cambellton Met


PROVINCE TYPE OF STORE

NOVA SCOTIA

Greenwood Met
New Glasgow Greenberg
Bridgewater MetMart
Sydney River Greenberg

NEWFOUNDLAND

Stephenville Greenberg
Clarenville Greenberg
Corner Brook MetMart




CONTACT: Gendis Inc. - Winnipeg

Allan MacKenzie, 204/474-5200

or

SAAN - Montreal

Bob Whitney, 514/638-4461

or

Lafleur Communications

Daniel Levesque, 514/288-8877

or

Caron Belanger Ernst & Young Ltd. - Trustee

Daniel Larouche, 514/282-1100

or

Advance Planning & Communications

Ann Smith, 416/967-3702
COPYRIGHT 1997 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 
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Date:Feb 11, 1997
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