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Fri, Mar 17, 2006 - Page 10 News List

Store sales spark rumor of a Carrefour pullout

AFP , SEOUL

Carrefour said yesterday it is considering selling some of its 31 South Korean outlets amid reports that the French discount retailer wanted to pull out of the country.

The labor union of Carrefour Korea said it had learned that negotiations were underway to sell off the entire Korean operation, and workers intended to block the plan by launching a strike next month.

Bae Jeong-guk, a publicity agent for Carrefour Korea said he had heard the reports but said that no confirmation was available.

"It is true that around the end of February, the company decided to consider the sale of some outlets showing weak results," he said.

"But we have no information as to whether Carrefour is seeking to sell the whole Korean unit as has been reported."

Carrefour Korea labor union leader, Kim Kyoung-wook, said negotiations had already been underway to sell the whole South Korean unit.

South Korea's top retailers Lotte Shopping Co and Samsung Tesco Homeplus, a 50-50 joint venture between Samsung Group and British retailer Tesco Plc, were among candidates to buy Carrefour, Kim said.

"Carrefour is willing to sell the whole Korean operation but it will depend on the outcome of negotiations as to whether Carrefour sells part or the whole Korean operation," Kim said.

Carrefour Korea has 6,400 employees in 31 outlets across the country, including seven in Seoul. The union has only 700 members, with most of them working in Seoul and the surrounding Gyeonggi Province.

"We will launch a strike on April 1. We urge the company to make sure in the course of negotiations with a potential buyer that there must be no lay-offs following any merger and acquisition," he said.

A spokesman for Lotte Shopping said all retail companies in South Korea would be interested should Carrefour be up for sale.

"It is common sense for any retail company in South Korea to get interested if Carrefour is really put up for sale," spokesman Tak Yong-kyu said.

He said, however, he had no information as to Carrefour's intentions concerning the future of its Korean unit.

Officials of Samsung Tesco declined to comment on whether the firm would be interested in acquiring Carrefour Korea.

Carrefour, which entered the South Korean market in 1996, is the country's fourth-largest discount store chain. Carrefour Korea posted 16 billion won (US$1.7 million) in net profit in 2004.

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