Euro Garage Issa brothers

[sancho panza]

So EG group is selling Asda some forecourts and then using the moeny to expand Asda???

 

Also,borrowing moeny isnt excatly the smae as rasising capital

https://uk.finance.yahoo.com/news/asda-vows-cut-prices-billionaire-191121932.html

Asda has vowed to lower prices for shoppers as its billionaire owners said they were raising up to $500m (£412m) to help pay down their petrol station empire’s debt pile.

The supermarket said its prices would be available to “hundreds more communities” after it completed a £2bn deal to acquire the UK and Ireland operations of EG Group, the forecourts giant. Both Asda and EG Group are owned by the Issa brothers, Mohsin and Zuber Issa.

EG Group is planning to use proceeds from the £2bn deal to pay down some of its loans that are due to be repaid by 2025.

 

It said it would also raise up to $500m from a loan which will be added onto existing terms with repayments due by February 2028.

The Issa brothers are under pressure to reduce their debt piles at both EG Group and Asda as rising interest rates pile further costs onto loans.

EG Group’s total debt stood at around $9.6bn at the end of 2022. It said the latest refinancing would help it reduce this to $4.2bn, with its debt pile already having been cut following a sale and leaseback deal in the US earlier this year.

[reformed nice guy]

47 minutes ago, sancho panza said:

 sale and leaseback deal in the US earlier this year.

Their model now depends on growing revenue at these leased back places at least as fast as the new owners will raise the rents....

[sancho panza]

https://www.telegraph.co.uk/business/2023/09/04/asda-billionaire-owners-loans-private-jets-supermarkets/

Billionaire Asda owners face questions on loans for private jets

The billionaire owners of Asda have been asked by MPs for details of interest free-loans allegedly provided to fund the purchase of private jets.

Darren Jones, chair of the business and trade select committee, has written to Mohsin Issa, who owns Asda with his brother Zuber, to ask about the “complex” structure of the brothers’ business empire and to question specific financial transactions.

Scrutiny of the Issas’ finances has been prompted by concerns that the company’s complicated structure and high debts may leave Asda customers facing higher than necessary prices.

[Chewing Grass]

2 minutes ago, sancho panza said:

https://www.telegraph.co.uk/business/2023/09/04/asda-billionaire-owners-loans-private-jets-supermarkets/

Billionaire Asda owners face questions on loans for private jets

The billionaire owners of Asda have been asked by MPs for details of interest free-loans allegedly provided to fund the purchase of private jets.

Darren Jones, chair of the business and trade select committee, has written to Mohsin Issa, who owns Asda with his brother Zuber, to ask about the “complex” structure of the brothers’ business empire and to question specific financial transactions.

Scrutiny of the Issas’ finances has been prompted by concerns that the company’s complicated structure and high debts may leave Asda customers facing higher than necessary prices.

Billionaires don't need loans to buy toy jets.

The pair are opportunist scummers and grifters whose business model is skimming from customers and borrowing from complicit banks.

[spygirl]

3 hours ago, sancho panza said:

https://www.telegraph.co.uk/business/2023/09/04/asda-billionaire-owners-loans-private-jets-supermarkets/

Billionaire Asda owners face questions on loans for private jets

The billionaire owners of Asda have been asked by MPs for details of interest free-loans allegedly provided to fund the purchase of private jets.

Darren Jones, chair of the business and trade select committee, has written to Mohsin Issa, who owns Asda with his brother Zuber, to ask about the “complex” structure of the brothers’ business empire and to question specific financial transactions.

Scrutiny of the Issas’ finances has been prompted by concerns that the company’s complicated structure and high debts may leave Asda customers facing higher than necessary prices.

I think he, HoC,hmrc all know that it's  leveraged up scam by fucktards.

However, as its all ecb money on the line they are only going thru the motions, stopping short, doing enough to say they investigated.

 

 

[sancho panza]

https://uk.finance.yahoo.com/news/asda-billionaire-owners-sell-off-141937362.html

Billionaire Issa brothers sell off KFC restaurants to reduce debt pile

The billionaire Issa brothers that own Asda have agreed to sell more than 200 KFC restaurants as part of efforts to pay down their huge debt pile.

EG Group said it will sell all its 218 KFC franchises in the UK and Ireland to the fast-food chain’s Kentucky-based parent company Yum Brands.

Proceeds of the sale, which is expected to complete in the first half of 2024, will be used to repay debt.

 

Blackburn brothers Zuber and Mohsin Issa have been trying to ease the pressure on EG Group, which operates thousands of petrol stations worldwide.

The company had built up a debt pile of $9.6bn (£7.6bn) at the end of last year, but surging interest rates have driven up the cost of servicing this debt.

Last month, the company said it had made “significant progress” in paying down its debts, which are understood to have been reduced to $5.7bn after EG Group sold its UK assets to sister company Asda for $2.5bn.

[spygirl]

On 06/12/2023 at 17:28, sancho panza said:

https://uk.finance.yahoo.com/news/asda-billionaire-owners-sell-off-141937362.html

Billionaire Issa brothers sell off KFC restaurants to reduce debt pile

The billionaire Issa brothers that own Asda have agreed to sell more than 200 KFC restaurants as part of efforts to pay down their huge debt pile.

EG Group said it will sell all its 218 KFC franchises in the UK and Ireland to the fast-food chain’s Kentucky-based parent company Yum Brands.

Proceeds of the sale, which is expected to complete in the first half of 2024, will be used to repay debt.

 

Blackburn brothers Zuber and Mohsin Issa have been trying to ease the pressure on EG Group, which operates thousands of petrol stations worldwide.

The company had built up a debt pile of $9.6bn (£7.6bn) at the end of last year, but surging interest rates have driven up the cost of servicing this debt.

Last month, the company said it had made “significant progress” in paying down its debts, which are understood to have been reduced to $5.7bn after EG Group sold its UK assets to sister company Asda for $2.5bn.

They only bought them 2y ago ffs.

I wonder if they've driven them into ground n kfc has had to act.

Theres some franchises that get dire reviews.

https://www.tripadvisor.co.uk/Restaurant_Review-g528762-d6922107-Reviews-KFC_Amesbury_Solstice_Park-Amesbury_Wiltshire_England.html

 

[sarahbell]

https://www.theoldhamtimes.co.uk/news/23977218.issa-brothers-eg-group-sell-kfc-branches-repay-debts/?ref=socialflow

 

Headline: Issa brothers' EG Group sell KFC branches to repay debts

First sentence
Blackburn's billionaire Issa brothers are to sell all 218 of the KFC franchises owned by their EG Group in order to repay their debts.

 

 

[Bus Stop Boxer]

I have an ASDA and a Waitrose in my town.

For an increasing number of regular staples, Waitrose is coming out chepaer now.

That is insane.

My Asda is like a remand home, the most depressing supermarket i've ever been in.

There is very little reason to go near the place anymore if price is not a factor.

[spygirl]

3 hours ago, Bus Stop Boxer said:

I have an ASDA and a Waitrose in my town.

For an increasing number of regular staples, Waitrose is coming out chepaer now.

That is insane.

My Asda is like a remand home, the most depressing supermarket i've ever been in.

There is very little reason to go near the place anymore if price is not a factor.

Retail is detail.

It might look easy but theres a shitload of logistic pain behind the scale of something like asda.

Issa brothers cousin driving round in a hire van stocking shelves  ain't going to cut it.

[Bornagain]

3 hours ago, Bus Stop Boxer said:

I have an ASDA and a Waitrose in my town.

For an increasing number of regular staples, Waitrose is coming out chepaer now.

That is insane.

My Asda is like a remand home, the most depressing supermarket i've ever been in.

There is very little reason to go near the place anymore if price is not a factor.

If you are feeling  brave then take a trip into the main Asda in Grimsby, if you are feeling positively foolhardy then do the same thing after dark.

I am not ashamed to admit that I would not be brave enough to venture in during the day, it would be a cold day in hell before I went in after dark.

[ashestoashes]

13 minutes ago, Bornagain said:

If you are feeling  brave then take a trip into the main Asda in Grimsby, if you are feeling positively foolhardy then do the same thing after dark.

I am not ashamed to admit that I would not be brave enough to venture in during the day, it would be a cold day in hell before I went in after dark.

but BJ wears a Grimsby town FC hat, is the Asda full of old Etonians ?

[Bornagain]

Just now, ashestoashes said:

but BJ wears a Grimsby town FC hat, is the Asda full of old Etonians ?

I would take a guess that the regulars have not enjoyed any education at all, never mind expensive private schooling.

[sancho panza]

https://www.telegraph.co.uk/business/2023/12/08/asda-hit-christmas-truck-drivers-strike-food-shortages/

Lorry driver strikes threaten Christmas food shortages at Asda

Retailer plans to use its own drivers during industrial action to limit disruption

Asda is facing walkouts from lorry drivers over Christmas in a fresh blow to the supermarket’s billionaire owners, the Issa brothers.

Around 80 lorry drivers at the retail giant’s operations hub in Rochdale are plotting strike action over the festive break.

Union chiefs at Unite said the industrial action, which is due to take place across several dates in December and on January 2, could lead to shortages of chilled foods on supermarket shelves.

The workers, who are employed by the supply chain company Wincanton, have argued they are being paid £1.24 an hour less than counterparts doing the same role at a different Asda facility in Lutterworth.

[spygirl]

Asda’s billionaire brothers face billions of pounds of debt – and talks of strained ties

Talks of a rift come as the Issas face unprecedented financial pressure

Towering 95ft high and overlooking the streets of Blackburn will soon be a £5m mosque that serves as a grand monument to the lucrative partnership between Mohsin and Zuber Issa. Family, faith and finance are forged together in steel.

The Lancastrian landmark will represent not only the billionaire brothers’ dizzying rise to wealth and success but more importantly demonstrate their commitment to the Muslim faith. 

In the words of a close family member, “Islam is always at the forefront” of everything the brothers do, who up until now have built their £5bn fortune together, in unison. 

However, recent talk across the retail sector points to a rift between Mohsin and Zuber, with tensions said to be running high over a family matter. 

Crucially, this alleged strain comes at a time of unprecedented financial pressure for the Asda owners, as billions of pounds of debt bear down on their empire like never before amid higher interest rates.

Their success has already driven a geographic wedge between the brothers as Mohsin runs Asda’s day-to-day operations from Leeds, while Zuber oversees EG Group’s petrol forecourts empire from Blackburn. This arrangement, albeit planned, has helped fuel talk of a rift.

“All is not harmonious within the family which is a shame,” says one industry insider.

On Friday, a source close to the brothers insisted: “Blood is thicker than water and they will always have each other’s backs.”

 

The Issas’ relationship has been at the heart of their business success. Zuber’s wife Asma gave a glimpse into the brothers’ intertwined lives during a Radio 4 interview in 2021.

“They actually hate being dubbed the billionaire brothers. They are very different. Zuber is someone who’s very easily approachable – he’s kinder. Mohsin is very work-orientated.”

EG Group’s commercial director Ilyas Munshi added: “Zuber is a visionary, he likes to build things. Mohsin, on the other hand, is more into the operational management, the details, how do we make it successful?”

Despite their contrasting personalities, Asma stressed that Islam is important to both of them, who grew up in a terraced Blackburn house with their parents, immigrants from Gujarat, India. 

“I don’t think anything will ever surpass faith,” said Asma. “From the moment they wake up to the nighttime, they never miss a prayer. We have five prayers a day – Islam is always at the forefront.”

This has not only led to the creation of a £5m mosque, but the brothers also donate 2.5pc of their wealth to charity through the Issa Foundation, which supports hospitals and provides free breakfasts for school children in and around Blackburn. 

During the BBC interview, Asma explained how it was Zuber who kickstarted the Blackburn-based brothers’ petrol empire, which started with an initial forecourt in Bury 22 years ago and was turbocharged after TDR bought a 50pc stake in EG Group in 2015. 

“Zuber always wanted to do his own thing,” she said. “He was really interested in retail. 

“I don’t know what he saw in the petrol industry. Every Saturday, Zuber would visit all of the sites. 

“A few years down the line when it got to a stage where Zuber couldn’t really handle everything himself, that’s when he approached his brothers and said ‘one of you, come and give me a hand’, and that’s when Mohsin came in.”

It wasn’t long before the pair were expanding their sprawling empire across the globe, snapping up thousands of forecourts and turning them into destinations where you could buy food as well as fill up your tank. 

This model led to them being crowned Forecourt Traders of the Year in 2011, sparking a £3,000 winners’ cheque. 

This is a far cry from the £5bn that the pair are now worth, which has allowed them to create a complex of five mansions on a leafy street in Blackburn, while also snapping up a £25m property in Knightsbridge, London. 

Trappings of wealth have led to the purchase of two Bombardier private jets, while their properties are thought to have access to a pool, a private prayer room and a cinema.

Their commitment to the community also previously led to them drawing up plans for Europe’s biggest Muslim cemetery in Blackburn, although these were later withdrawn.

The brothers’ property arm also recently applied to build 603,000sq ft of warehouse space near Blackburn.

Speaking to the FT in 2018, Zuber said: “People are always asking when will we move to London or Manchester. But the quality of life here is great. A lot of people do a few years in London and then come to the North West. They want to raise a family and have less pressure.”

But since acquiring Leeds-based Asda in a debt-fuelled £6.8bn deal in 2021, the Issas’ horizons have inevitably broadened as new doors have opened to them, and the scrutiny they face intensified. 

At a disastrous select committee hearing earlier this year, Mohsin told MPs that he was a “deeply private person” who was uncomfortable in public.

However, as a former senior Asda employee says, maintaining this privacy will prove an impossible task while running one of the largest retail companies in the country.

“Chief executives in the retail sector are like celebrities,” he says. “They need to make themselves available for interviews and be public-facing. 

“It is very hard to live under a rock as a supermarket boss. It is that important to peoples’ lives – which supermarket they shop in is how they define themselves.”

MPs have continued to ask questions about the Issa brothers’ finances and the state of their empire. Last week, Mohsin sought to ease concerns over the company’s complex structure by writing to business and trade committee chair Liam Byrne MP to deny basing companies offshore in Jersey for tax purposes.

Regardless, the financial pressures they face in a world of higher interest rates are undeniable. Last week they sold off their network of 200 KFC franchises to pay down debts.

As one City analyst says: “Next year is posing more than less challenges for Asda.”

Much of this stems from the $5.7bn (£4.5bn) of debt attached to EG Group, which will continue to wreak financial trouble as long as interest rates remain high.

However, what has not yet fully been accounted for is the higher business rates bill that Asda faces across its 600-plus stores next April. 

That is in addition to the anticipated rise in labour costs caused by the Government’s recent increase in the national living wage, which will impact Asda’s 140,000-strong workforce.

This hike in costs comes against the backdrop of falling retail sales, as Asda continues to lose market share to discounters Aldi and Lidl. 

All of which will pose a threat to a balance sheet already under pressure.

“If you look at Asda’s performance, only Iceland has got a worse sales dynamic in the UK,” says a City analyst. “They are losing volume, they have a lot of debt and costs are going up. 

“This is a time when you want everyone facing the same direction and galvanised.”

Their signature debt-fuelled takeovers are no longer on the menu. Instead the brothers are scrambling to reduce costs by selling off businesses and using the proceeds to reduce their overall borrowing.

But speculation of a rift has led some to suggest that the pair are unable to be in the same room together, with a senior industry figure going as far as to describe the fallout as potentially “irreparable”. 

This interpretation has been rejected by a source close to the Issas, who says that Mohsin and Zuber meet regularly and speak every day. 

They noted that the pair visited operations overseas together earlier this month on the same flight, while also hosting EG Group’s quarterly results in the same room on 29 November in Blackburn.

Yet, regardless of the state of their relationship, a retail executive at a rival supermarket chain has pinned Asda’s problems on Mohsin’s power at the top. The novice grocer has held control ever since the company’s search for a new chief executive failed to bear fruit last year.

The executive says that Asda, which has been linked to departing Tesco boss Jason Tarry, will struggle to find someone to run the business as long as Mohsin is at the helm. 

These views are echoed by another industry source: “Mohsin is not a backseat driver, he’s sitting in the passenger seat. They need to figure out Mohsin’s role. 

“Does he become executive chair and they bring in a managing director? Or can this business not recruit a chief executive while he’s there? That itself isn’t helpful to the clarity or direction of the senior management team, never mind the recruitment of talent. 

“There may need to be a fundamental change at the top of Asda if they are to entice new top management.”

A source close to Asda said: “The process to identify a long-term CEO of Asda remains active. In the meantime, Mohsin continues to lead Asda, using his extensive experience of transforming businesses. He is supported by an exceptionally strong senior team to lead the business day-to-day.”

Similar questions may be raised next week when Mohsin is thrust into the spotlight once again when he will be forced into a fresh grilling before the business and trade committee over the role of private equity in the retail sector. 

He will hope to improve on his last performance when his responses prompted anger and even led to accusations of contempt from MPs who claimed to have been misled. Mohsin has denied the allegations.

 

Clive Black, an analyst at Shore Capital, has followed the pair’s journey closely.

“The Issa brothers have been one of the most formidable family business pairings in British modern times,” he says.

“What they have very quietly done from a petrol garage in Bury is build a global empire. And that is where I have got incredible admiration for them. They are risk-takers and I think they have been exceptionally fortunate to have TDR as their partner. 

“Where I am wholly impressed with the Issas, is that they have embraced debt capital markets. 

“These guys built a business, made themselves billionaires and struck an incredible deal for Asda. It was genius in terms of identifying opportunities and understanding debt markets.”

However, even Black admits they have been caught out by the rise in interest rates over the past 18 months: “They clearly didn’t anticipate that interest rates would rise as steeply and as quickly as they did. And that has meant they have had to dispose of businesses. I imagine that has been quite stressful, it’s a different context to go-go growth.” 

Whether the stresses of business have since combined with family matters to boil over into an irreparable fallout is a question only the brothers can answer. They declined to comment.

[spygirl]

First forecourts 30y ago.

Big winner of 3k in 2011....

5bln today.

You can't get more unIslamic than paying interest on 5bln of debt ffs.

 

 

[spygirl]

I've never heard them speak before

 

[One percent]

36 minutes ago, spygirl said:

I've never heard them speak before

 

They don’t come across as the brightest bulbs on the tree do they. 

[spygirl]

Asda boss Mohsin Issa says 'no gaps in finances' after concerns raised about £4.2bn debts

Bosses at Asda have told MPs there are “no gaps” in its finances amid criticism over the supermarket giant’s accounting structures.

https://www.yorkshirepost.co.uk/business/asda-boss-mohsin-issa-says-no-gaps-in-finances-after-concerns-raised-about-ps42bn-debts-4451453

The UK’s third largest supermarket, which is headquartered in Leeds, also said nobody should be concerned about its debts, despite confirming it has £4.2 billion of debts on its books.

The supermarket chain’s leadership team faced questions on Tuesday from MPs on Parliament’s Business and Trade Select Committee.

 

MPs quizzed the firm over its finances, more than two years after its debt-laden takeover by the billionaire brothers, Mohsin and Zuber Issa.

Mohsin Issa, co-owner of Asda, which employs 151,000 people across the UK, shrugged off suggestions there was money unaccounted for in its accounts.

“I can assure you there is no gap in the accounts signed off by our auditors,” he said.

The company confirmed it has about £4.2 billion worth of debt across its different registered companies in the UK.

When asked if he had any worries about its degree of debt, Mr Issa said: “No, I don’t.

“What I would say is that the debt leverage at the start of the year was at 4.2 times, that has gone down to 3.8 times and that trajectory is to go down even further by the end of this year.

“At the same time, we are investing in colleague pay, customer pricing and loyalty. The business in highly cash generative.”

Liam Byrne MP, chair of the select committee, told the retailer he was worried about the “very large but unclear amount of debt” he claimed the firm is facing.

Michael Gleeson, chief financial officer at Asda, said a portion of its debt will face fresh borrowing rates next year and highlighted that the business is therefore expecting a further £30 million worth of interest costs.

The finance boss also defended the use of holding companies based in Jersey within its accounting, stressing that it pays UK corporation tax on all its operations.

He added: “Companies registered in Jersey can, in the longer term, facilitate corporate restructurings more quickly than can happen in England and Wales.”

He also said registering the companies in Jersey could reduce its exposure to stamp duty upon selling any parts of its business, adding that this process can also take place through UK-based companies, but will be a slower process.

The scrutiny comes days after reports that rival Yorkshire-based retailer Morrisons, which was bought by US private equity firm CD&R, told staff it needs an urgent overhaul as it seeks to improve its finances in the face of a growing debt burden.

[sarahbell]

Too big to fail.

Asda might be nationalised. To be honest the food bank thing could probably work better directly from a supermarket.

[spygirl]

https://www.thisismoney.co.uk/money/markets/article-12882153/amp/Asda-owner-shrugs-4bn-debt-mountain-insists-stay-charge.html

He also denied a claim by Conservative MP Mark Pawsey that the Asda deal was ‘a massive leap’ for the brothers, who built the EG Group into a leading petrol stations operator, or that he lacked the ‘skills and background’ to run the Leeds-based food retailer.

‘I’m actually best qualified to take this job,’ said Issa, who is overseeing the ‘significant project’ of separating Asda’s computer systems from previous owner Walmart.

[Noallegiance]

I hope Bublé got paid.

[spygirl]

Will £4bn Asda debt and family rift damage the Issa brothers

https://www.thisismoney.co.uk/money/markets/article-12896439/Will-4bn-Asda-debt-family-rift-damage-Issa-brothers.html

Celebration: The Issa brothers and former EY executive Elizabeth Price attended the Entrepreneur of the Year awards in 2018

 

[spygirl]

Asda’s private equity owners grilled over debt and worker conditions

TDR Capital downplays concerns over UK supermarket’s multibillion-pound debt load

In a rare public appearance in front of the UK Parliament’s Business and Trade Committee, TDR managing partner Gary Lindsay downplayed concerns over the £4.2bn of debt that the UK grocer bears in a higher interest rate environment. 

Private equity firms such as TDR took advantage of more than a decade of ultra-low interest rates to strike thousands of debt-funded deals for companies across sectors ranging from retail to healthcare.

In a higher interest rate environment, some of these businesses are seeing the cost of servicing their loans increase and many will need to refinance existing their debt at a higher cost in the coming years. 

“While it’s been great for the Asda business to enjoy a lower cost of capital for the last three or four years, that was never a central tenet of us investing in the business,” Lindsay said.

 

...

In response to questions over working conditions and the strike action, TDR’s Lindsay said that Asda regularly met with the union.

“I do also want to be clear, we as TDR Capital don’t run the business. We sit on the board. I don’t want to conflate what Asda do from a managerial perspective, how they engage and ultimately how they face off against different stakeholders in the business,” Lindsay added. 

 

Comments - 

Leverage never adds value. It shifts the risk from the shareholders (who have less capital invested at stake, but still profit from the upside) to other stakeholders. This includes the employees, the customers and debtholders (who tend to be misguided pension funds). What's more, they get a huge tax break for adding leverage, thanks to the deductability of interest, meaning most of these businesses never pay any corporation tax at all. It's time to crack down on private equity. It is an industry leeching off the rest of society.

 

CMA needs questioning next. Those clowns blocked the merger with Sainsbury's and instead left an asset heaving business ripe for stripping - which TDR has duly obliged to do. Which is better for consumers: a larger more cost-efficient entity to compete with Tesco; or, a highly levered operator with rising fixed costs and a large interest burden, limiting its ability to cut costs for consumers. I wonder.

 

 

 

[spygirl]

Asda's delayed SAP migration forces extension to Walmart's backend support contract

19 

Three years after leveraged buyout, $240M ERP plan yet to bear fruit

https://www.theregister.com/2024/01/23/asda_sap_delay/

...

Last year, the annual report from Bellis Finco said that in February 2021 the group embarked on a program called Project Future, designed to separate its IT systems from Walmart's with an initial budget of £189 million ($240 million). At the same time, it created a "Transitional Services Agreement with Walmart for an initial period of three years," according to the report for the year ended December 31, 2022.

 

....

 

The systems integrators on the deal to create an S/4HANA ERP system hosted in Microsoft's Azure cloud are Indian vendor TCS and SAP itself. Both companies declined the opportunity to comment. Also working on the project is Resulting IT, although The Reg understands it works solely supporting Asda's business team.

...

 

Sources close to the project speaking to The Register said Asda was wedded to a greenfield implementation from the start, with a vision of what "perfect looked like," rather than building a system that worked in the short term which could be improved upon at a later date.

Asda has also struggled to build a security team as that function had been run entirely by Walmart from the US, the individual said.

SAP launched its RISE with SAP program in 2021, with the promise to lift and shift customer systems to the cloud, while also helping with the transition from legacy systems to S/4HANA and in the business transformation required.

 

Comment - 

It's SAP

That's how you get to £189m to just swap out one version for another.

Because SAP have decided that you have to.

Asda will go down, not because the Issa brothers run out of money, but because they will become incapable of running the stores with a broken ERP system.