Germany's Metro to restructure cash and carry business(70196)

Metro puts firmer grip on cash and carry business

German retailer Metro AG is taking its struggling cash and carry business under its wing to cut administrative costs and push expansion of its main sales driver, it said on Tuesday.

Metro, the world's third-biggest retailer behind France's Carrefour and U.S. industry leader Wal-Mart, will divide its wholesale Cash & Carry business into two units.

Frans Muller, who used to head Cash & Carry, will be in charge of the Asia and new markets unit at Cash & Carry, while Joel Saveuse will lead the European and mature markets business.

"The new structure reflects the great importance Metro Cash & Carry has within the group, and takes into account the considerably different regional market requirements," the retailer said.

Cash & Carry accounted for almost half of Metro group sales in 2008 and the business has been struggling particularly in Metro's home market of Germany.

Metro is testing new format stores in Germany that focus more on core hotel, restaurant and catering customers, as well as selling fewer non-food ranges, more own-brand goods and offering a delivery service.

Metro also reported a 9 percent drop in 2009 earnings before interest and tax (EBIT) before special items to 2.024 billion euros ($2.77 billion). Analysts, on average, had expected 1.899 billion euros, according to Thomson Reuters I/B/E/S.

Metro said it will publish its 2009 annual report on Wednesday.

Metro trades at around 14.8 times 12-month forward earnings, according to Thomson Reuters StarMine, which weights analyst estimates according to their track record, while Wal-Mart and Carrefour trade at around 13.

Germany's Metro to restructure cash and carry business

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