After 50 years as a state-owned entity, Omar Effendi is finally going private again. Sherine Abdel-Razek gauges the reaction of its employees and customers "We found out about the sale from the newspapers, no one in the management or the company's trade union bothered to explain the repercussions of the sale on us," said Said Adel Moselhy, a salesman at Omar Effendi's branch in Roxy, Heliopolis, of his company changing hands. Minister of Investment Mahmoud Mohieddin and Head of the Holding Company for Trade Hady Fahmy, together with the Saudi Anwal group representative in Egypt, reiterated several times that protecting the rights of Omar Effendi employees is a priority. They added that any violation of this condition can deem the sale invalid. Omar Effendi has been a national icon and an eye witness on social, economic and political changes in Egypt for more than a century. It was established by a Jewish family at the turn of the 20th Century, was nationalised in the mid-1960s, lost its lustre in the 1980s due to public sector mismanagement, and was listed for privatisation in the late 1990s. Low bids and the company's huge workforce always blocked any sale, until Anwal clenched the deal. The Riyadh-based company is a women and children clothes retailer, operating more than 140 stores in Saudi Arabia with a workforce of about 600 employees. Ending a 10-month saga, the Saudi Anwal United bought Omar Effendi after one of the fiercest battles between the liberal-minded cabinet of Prime Minister Ahmed Nazif and public opinion. Mohieddin said that the holding company is retaining a 10 per cent stake in Omar Effendi to be able to interfere to protect workers' rights whenever necessary. This 10 per cent stake can be transferred to employees when they have the resources. "How do we know that these assurances are not just words," questioned Moselhy. "The new owner can keep me but who guarantees that he will not transfer me to another governorate or that he will not lower my employment category?" Although Moselhy's fears were echoed by all the employees interviewed by Al-Ahram Weekly, there was a sense that conditions had hit rock bottom under public sector management and change was welcome. "Provided that they do not lower our already very low salaries, things can never be worse," according to Moselhy. Like most state employees, Omar Effendi workers are underpaid. "I have a BSc in commerce and have been working here for the past 28 years, and until now my salary does not exceed LE400," declared Mohamed Hassan, a senior salesman at the Roxy branch. At Hassan's store, there are more than 65 employees and the value of the payroll cheque does not exceed LE13,000 per month. "A salesman my age and with my experience won't get less than LE1,000 in a privately-owned department store like Al-Tawheed Wal-Nour for example," he stated. The commission for salesmen in Omar Effendi has not changed since 1992, and has a ceiling of LE180 per month. "Even if I sell goods worth LE50,000, I will never get more than the LE180," complained Moselhy. On top of this, the cost of any broken item is deducted from Moselhy's salary. "I have no incentive to work and serve customers," he announced. Poor working conditions are not the only problems plaguing public sector management according to Omar Effendi employees. "I read that the deal was undervalued, but having worked here for the last 30 years and seeing the huge losses makes me feel that even if it was sold for one million pounds the future under private management is much better," said Ahmed Afifi, a store deputy manager. Omar Effendi has been losing customers to private sector competition and retailers of durable goods. The dust-covered highly- priced goods are crowding out customers of different social standards. Sherif Mahmoud, an engineer window shopping in front of a durable goods store a few strides away from Omar Effendi's branch on Ibrahim Al-Laqany Street, said that while Omar Effendi was always considered a national icon, the management inefficiency changed it into a living nightmare. "Why would I go to Omar Effendi? It is no longer cheap and I also have to deal with reluctant salespeople who act as if they are doing me a favour when they answer my questions," declared Mahmoud. "If the deal is finalised smoothly and the new owner comes up with a plan to use all the assets of the store, it would be an incredible change." Overpriced goods at Omar Effendi are a common complaint by shoppers. "I come here because Ain Shams University, where I work, has an agreement with the store to buy goods in installments," said Amina, a librarian in her mid-fifties, who was shopping with her soon-to-be-married daughter for kitchen accessories. "I know it is more expensive than other stores for certain items, but I can't afford paying cash." But not all customers are willing to pay the difference in price which is anything but marginal. Just across the road from the store in Roxy, a privately-owned store of electric household appliances displays the same items for much lower prices. A water heater sells for LE477 at Omar Effendi, but only LE390 at the competing store; a no frost refrigerator costs LE500 more at Omar Effendi than at the competition. "Goods are priced higher because suppliers are not paid in cash, since Omar Effendi lacks the needed liquidity," explained Afifi. "We sell the goods at higher prices to compensate for the delay in payment." Another reason given by employees at a branch in Zeitoun is that the supplier has to pay a lot of bribes to senior management for his products to be displayed. At the end of the day, the customer foots the bill. Amm Saleh, who has worked at Omar Effendi for 32 years, believes that mismanagement is Omar Effendi's main vice. "In the old days, purchasing committees included salesmen," he remembered. "Management would ask us which items were on demand and what commodities are not in stock." Now goods are bought by headquarters and distributed to different branches, regardless of their target customers and needs. A colleague of Amm Saleh, who preferred to remain anonymous, interrupted by saying there is no sales strategy at all . "During the entire summer, there were no fans displayed on sale although there were many in storage," he said. "Now in October, we started to put the fans out. Private sector management would never do that."
