Print

Mail

wiki links

Carrefour's chairman quits post

The resignation on Wednesday of the supervisory board chairman at Carrefour SA, coupled with a major share purchase by two big-name investors, fueled speculation of a shift in strategy at the French retailer, which is struggling to meet fierce competition at home and abroad.

Carrefour, the world's second-largest retailer, after Wal-Mart Stores Inc, said its supervisory board chairman, Luc Vandevelde, would be succeeded by Robert Halley, strengthening the grip of the Halley family, Carrefour's biggest shareholder.

Aurelie Launay, a spokeswoman for Carrefour in Paris, declined to give a reason for Vandevelde's resignation after two years in the job.

The news came shortly after Bernard Arnault, the richest man in France, and Colony Capital, a US private equity firm, said they had bought a 9.1 percent stake in Carrefour, worth about 4 billion euros (US$5.2 billion). The two, who said they were long-term investors, are joining forces with Axon Capital, which already owns 0.7 percent of Carrefour.

Arnault and Colony Capital, which is run by the billionaire Thomas Barrack Jr., would like to work with the Halley family and Carrefour's management to "unlock some of the inherent value of the company," a spokesman for the two companies said.

Arnault is chief executive of LVMH Moet Hennessy Louis Vuitton, the luxury-goods company, and Colony Capital specializes in real estate investments.

"They may see a hidden value in the stock on the back of the size of Carrefour's real estate," said Alexandre Iatrides, an analyst at Richelieu Finance in Paris.

Iatrides said the company's real estate may be worth 20 billion euros, compared with the valuation of 15 billion euros the company has placed on it.

Private equity firms and other investors have been attracted to retail companies because of the real estate they own and the potential to make money by selling the real estate and leasing it back. Colony specializes in buying firms to manage their real estate.

Carrefour has been at the center of takeover rumors since Vandevelde was ousted as chairman of the family's own holding company this year. The Halley family, which has owned a 13 percent stake in Carrefour since it sold its Promodes chain to the company in 1999, said last month that Vandevelde no longer shared the family's strategic goals.

The value of the Halley family stake has almost halved over the last seven years.

Carrefour, which has more than 12,000 outlets in 29 countries, has struggled to keep its position as the cheapest supermarket chain in France because of competition from rivals like E.Leclerc. Carrefour disappointed investors this year when its fourth-quarter revenue missed analysts' estimates.

Vandevelde has been partly credited for helping Carrefour back to its feet after years of slumping sales, and the company's shares have risen by about 18 percent since he joined. The company has pursued a strategy of expansion in emerging markets, but it has struggled in Italy and Taiwan and has come under pressure to cut prices in France.

Vandevelde joined Carrefour from the British retailer Marks & Spencer in 2005. His ties to the Halley family go back to the 1990s, when he headed Promodes.
This story has been viewed 1043 times.