Another profit warning upsets Carrefour shareholders' meeting

This week is going to be crucial for Carrefour, the world's second biggest supermarket chain. On Tuesday 21 June, its Ordinary and Extrordinary General Shareholders' Meeting will take place in the Carrefour du Louvre in Paris. The meeting is expected to be turbulent, as the Carrefour group issued a profit warning for the third time in less than a year.

 

35% drop in profits

While the problems in Belgium appear to be settled after a painful reorganisation, the French troubles are going from bad to worse. On the home market, representing 43% of Carrefour's turnover, the battle with Auchan and Leclerc have a big negative impact on both market share and profitability – sending the company's profits down 35% for the first half of 2011.

Carrefourtopman Lars OlofssonCEO Lars Olofsson, heading Carrefour France since James McCann's departure, has appointed 51 year old Noël Prioux – who has been working at Carrefour for 27 years – to steer the French branch clear of trouble with another recovery plan.

 

Short-lived managerial expansions

Olofsson worked for Nestlé until he was asked to lead Carrefour in 2009, and he has reorganised quite a bit since then: he bought Vincente Trius from Wal-Mart and James McCann from Tesco, reorganised the Belgian branch and introduced with great speed the restyling of Carrefour's hypermarkets to Planet stores.

The managerial acquisitions were not long-lasting: Trius has already left to lead Canadian supermarket chain Loblaw and McCann's departure at Carrefour was as sudden and unexpected as it was strange and unexplained. Olofsson had to take control of Carrefour France himself, endangering the planned divestiture of Carrefour Property.

 

Delay of real estate plans angers Louis Vuitton

The delay in bringing the real estate branch to the stock exchange has angered quite a few stockholders, who considered this operation as a perfect way to compensate the losses in value their participation had suffered over the last few years. Among the fiercest proponents of such a divestiture – and therefore among the most angered shareholders – are Bernard Arnault, chairman of luxury holding LVMH, and investment firm Colony Capital.
 
The stock markets were disappointed in the profit warning: Arnaud Joly of brokerage house Cheuvreux thought that “a split in the Carrefour holding now belongs to the possibilities, especially if the plan to modernise 500 European shops fails”. Last week, the Carrefour shares

had already dropped 10% when bank UBS labeled Carrefour's shares “one of the least attractive in the retail sector”.

This week is going to be crucial for Carrefour, the world's second biggest supermarket chain. On Tuesday 21 June, its Ordinary and Extrordinary General Shareholders' Meeting will take place in the Carrefour du Louvre in Paris. The meeting is expected to be turbulent, as the Carrefour group issued a profit warning for the third time in less than a year.

 

35% drop in profits

While the problems in Belgium appear to be settled after a painful reorganisation, the French troubles are going from bad to worse. On the home market, representing 43% of Carrefour's turnover, the battle with Auchan and Leclerc have a big negative impact on both market share and profitability – sending the company's profits down 35% for the first half of 2011.

Carrefourtopman Lars OlofssonCEO Lars Olofsson, heading Carrefour France since James McCann's departure, has appointed 51 year old Noël Prioux – who has been working at Carrefour for 27 years – to steer the French branch clear of trouble with another recovery plan.

 

Short-lived managerial expansions

Olofsson worked for Nestlé until he was asked to lead Carrefour in 2009, and he has reorganised quite a bit since then: he bought Vincente Trius from Wal-Mart and James McCann from Tesco, reorganised the Belgian branch and introduced with great speed the restyling of Carrefour's hypermarkets to Planet stores.

The managerial acquisitions were not long-lasting: Trius has already left to lead Canadian supermarket chain Loblaw and McCann's departure at Carrefour was as sudden and unexpected as it was strange and unexplained. Olofsson had to take control of Carrefour France himself, endangering the planned divestiture of Carrefour Property.

 

Delay of real estate plans angers Louis Vuitton

The delay in bringing the real estate branch to the stock exchange has angered quite a few stockholders, who considered this operation as a perfect way to compensate the losses in value their participation had suffered over the last few years. Among the fiercest proponents of such a divestiture – and therefore among the most angered shareholders – are Bernard Arnault, chairman of luxury holding LVMH, and investment firm Colony Capital.
 
The stock markets were disappointed in the profit warning: Arnaud Joly of brokerage house Cheuvreux thought that “a split in the Carrefour holding now belongs to the possibilities, especially if the plan to modernise 500 European shops fails”. Last week, the Carrefour shares

had already dropped 10% when bank UBS labeled Carrefour's shares “one of the least attractive in the retail sector”.

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