Dutch retailer Laurus' radical restructuring plans to axe five of its six store formats, fire half its head office staff and sell non core assets, including its Spar c-stores, have surprised analysts expecting less drastic measures to tackle the company's structural problems. Laurus is Ahold's biggest domestic rival, with 26.6% share of the Dutch food retail market. "The scale of the job and the pace of its implementation is too ambitious," warns Schroder Salomon Smith Barney in a report on Laurus' new strategy, predicting the retailer will "inevitably risk losing sales". The decision to convert all the stores to one format (Konmar) with a variety of own label ranges to appeal to the top and bottom ends of the market is a dangerous move, adds the broker. Rival Ahold has two distinct formats, upmarket Albert Heijn and the downmarket C-1000. By sticking to a single format, Laurus risks being "caught between the two". Morgan Stanley Dean Witter analyst Andrew Fowler said the firm had "inexplicably" chosen to go with the Konmar name based on market research of "a thousand housewives... there is no hard evidence to suggest the Konmar brand is the best choice." Of the 800 stores Laurus intends to retain, 330 are franchised, another factor that could cause problems. says the SSSB report. To prevent disgruntled franchisees defecting to Ahold, Laurus has promised to subsidise the conversion process to the tune of 200m euros. Of the axing of 700 of the 1,470 head office staff, SSSB pointed to the ill fated partnership between Somerfield and Kwik Save, when Somerfield discovered, to its cost, that the "several hundred people it made redundant had been doing something". But analysts welcomed Laurus' plans to sell non core assets including the discount Basismarkt chain, Pet's Place speciality stores and the Spar stores. Basismarkt is losing money while the convenience sector is shrinking in the Netherlands. {{NEWS }}

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