Carrefour is in the process of critically reviewing its international operations. According to French media, a sale of the Polish and Taiwanese operations is imminent, but the retailer calls the reports premature.
Italy and Argentina also considered
French business magazine Challenges rang the bell: according to the weekly, top executive Alexandre Bompard has been discretely working on the sale of the divisions in Poland and Taiwan for several months. The retailer is said to have engaged KPMG for this project. The concrete reason is the recent interest of Canadian group Couche-Tard in taking over Carrefour: this surprising move has apparently woken up the French supermarket group and prompted the CEO to take a critical look at all its international activities. A sale of the two subsidiaries could yield 1.5 billion euros.
In addition, Carrefour would also consider selling its operations in Italy and Argentina, two markets where the retailer has failed to reach the critical mass needed to become truly profitable. On the fragmented Italian market, Carrefour is just one of many players, and the crisis is hitting hard as well. By concentrating on its main European markets and on Brazil, the retailer can use its financial resources in a more focused way to achieve profitable growth, observers believe.
Dissatisfied investors
And that is necessary. For many years, investors have been dissatisfied with the performance of their Carrefour shares. The retailer performs much worse than many of its peers. Even though Alexandre Bompard’s transformation plan has put the group in motion, there is still a lot of work to be done. The top executive already indicated several times that Carrefour wants to play a role in the further consolidation of the European food retail, but after the Couche-Tard bid, the retailer suddenly became a takeover target itself, and that was not as planned.
In a reaction, Carrefour confirms that the group is indeed “reflecting on the critical mass of its international subsidiaries and on possible future consolidation, alliances or divestments. This strategic reflection is only a start and Carrefour denies having taken any decision to sell assets.” In short: something is definitely going on and the Challenges article caught the retailer off guard.
