Financial problems at Spain’s nationwide chain of department stores, Galerias Preciados, are affecting Madrid-based GP Informatica SA, the 18-month old computing subsidiary, where Luis Alvarez took over recently as managing director when Antonio Aleman left to become marketing director of the GP Group. Alvarez said GP Informatica, which is 70% owned by the GP Group with Aleman and another private shareholder each having a 15% stake, owes its creditors some $2.3m, a sum that pales when compared with GP Group’s $106.1m debt to the Spanish tax authorities and social security. GP Group has recently announced the suspension of debt payments and is looking for a new partner to inject $75m which, together with a possible government loan, would give the group a new lease of life. GP Informatica currently has 25 retail outlets situated within Galerias Preciados’s department stores and enjoys a certain degree of autonomy, in that it has its own independent marketing department and post- sales service. Speaking recently to Tribuna Informatica, Alvarez welcomed the group’s suspension of payments announcement, since it ended a period of uncertainty, in which clients have been lost, while it has also staved off potentially damaging legal action, which might have led to the closure of some of GP Informatica’s centres. Alvarez confirmed that 1994 turnover was slightly down on the previous year at around $10m, but he cited the five Madrid stores and the Levante centre on the east coast as providing the most encouraging growth and he forecast a 35% overall increase in turnover for 1995. Plans to add to the current network of stores by setting up a chain of franchised shops have been put on ice for the moment, due to the group’s financial problems, but Alvarez was hopeful that within the next three years, 50 shops would be established along these lines. This sales channel could be extremely successful, for every assistance would be given to the franchisee, who would receive the stock on a sale or return basis, thus limiting his or her initial investment, he said. One of GP Informatica’s main suppliers, Dell Computer Corp, recently opted to curtail its agreement with GP Informatica, not wishing to continue in retail. Alvarez admitted that Dell’s decision had been felt, since its products were highly compatible with GP’s needs.

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But an annual contract had been renewed with Hewlett-Packard Co, and further contracts were maintained with Siemens-Nixdorf Informationssysteme AG, Toshiba Corp, Unisys Corp, Canon Inc, Star Technologies Inc and Epson Corp, while negotiations are currently taking place with Oki Electric Industry Co Ltd. GP Informatica will now have to concentrate on reducing its costs to a minimum, while one response to its fragile position has been the move to introduce clone computers onto its shelves. A supplier, Radio Shack, has already been found, and the aim is to sell in the region of 1,000 computers a month, priced at around $1,300. Finally, Alvarez confirmed that GP Informatica had no plans for staff redundancies.