“Colruyt will become one of Europe’s leading distributors”

“Colruyt will become one of Europe’s leading distributors”

The stock market analysts of Citigroup seem to have lost faith in a number of European large distributors. For five of the eleven companies the analysts follow closely, they lowered their advise. Four others fare better, with a striking role for Belgian Colruyt; which could "become part of a small group of European leaders".

Five companies drop in stature

Citigroup ascertained that, without taking inflation and price evolution into account, the profit of the sector dropped 12% over the past decade. The group also expects this negative trend to continue due to the economic crisis and the ever more difficult macro-economic circumstances.

 

This is why Citigroup lowered its advises for French Casino, British Sainsbury’s and German Metro from “Neutral” to “Sell”. Belgian Delhaize and British Morrison dropped from “Buy” to “Neutral”.

 

Shares take hits

The consequences were immediately visible on the trading floors: the share of Delhaize took a hit of 4.55% (far worse than the -2.33% of the Bel20 in Brussels), while Casino (-2.05%) also did worse than Parisian CAC40 (-1.71%). Even Carrefour, with its unchanged advice (even though Citigroup is expecting an organic growth below expectations), had to take a hit: the share of Carrefour dropped 4.24% at the exchange in Paris.

 

The German company Metro had its biggest loss in a single day for three months in Frankfurt (-5.43%, while the DAX ‘only’ lost 1.24%). According to Citigroup the explanation can be found in the growth slowdown in Russia, a region responsible for a quarter of the operational cash flow of the company.

 

“Colruyt to become leading distributor”

Some distributors however will get better through the crisis than others, predict the analysts of Citigroup. In that respect they are looking at Portuguese retailer Jeronimo, British Cash & Carry group Booker and Dutch company Ahold.

 

Colruyt will also be part of that group: together with the three other companies, the Belgian distributor should become part of a “small group of European leaders within ten years”, says Citigroup. That however does not guarantee success on the short term: Colruyt lost 2.92% yesterday - and Ahold lost even more with 4.16%.

Questions or comments? Please feel free to contact the editors


Arket Brussels opens: discover H&M's latest concept

14/09/2017

On Friday 15 September, H&M Group’s new store formula opens its doors on the Guldenvlieslaan in Brussels. The press got a sneak preview and discovered a surprising mixture of fashion, interior design and food. 

Nordstrom opens store without storage

13/09/2017

American fashion chain Nordstrom is to trial a new store formula in Los Angeles next month, in which customers will only be able to get advice and try out clothing. Purchases can be picked up at the store at a later date.

Primark benefits from weaker British economy

12/09/2017

Irish fashion chain Primark takes full advantage of the weak British economy, which prompted its parent company AB Foods to adjust its full-year forecast. The chain will also continue its expansion plans.

Participatiemaatschappij Vlaanderen invests in FNG

11/09/2017

Government investment fund Participatiemaatschappij Vlaanderen (PMV) will invest 15 million euro in fashion group FNG in return for 5 % of its shares. The money will go towards international expansion.

Gap Inc will focus on Old Navy and Athleta

08/09/2017

American fashion company Gap will alter its internal strategy and turn its attention to Old Navy and Athleta. Gap and Banana Republic, which both received the most attention up until now, will have to step aside.

Global Fashion Group cuts losses

08/09/2017

Global Fashion Group, the fashion group founded by investment group Kinnevik and Rocket Internet, managed to lower its losses even more in the second quarter. On top of that, turnover grew more than 25 %.

Back to top