Carrefour to sell fringe Asian stores(70083)

Carrefour to sell fringe Asian stores

Carrefour, the world s biggest supermarkets group after Wal-Mart of the US, is planning to sell its operations in Malaysia, Thailand and Singapore to focus on countries in which it is market leader.

The retailer would not comment on the potential disposals, which are at an early stage and which analysts said could fetch 600m- 800m.

The planned sale is in line with the strategy set out by Lars Olofsson, chief executive, to pull out of markets in which the supermarkets group has little prospect of becoming market leader and invest in those where it already is leader or has a good chance of becoming one.

He has already shut down operations in Russia and southern Italy and last week after protracted negotiations, finalised an agreement with unions in Belgium to restructure loss-making operations.

Mr Olofsson told shareholders at the group s annual meeting in May that Carrefour was obliged to listen to offers for its businesses in markets where leadership was unattainable.

In Asia, the goup is committed to China, where almost three-quarters of its Asian stores are based and to Indonesia, its second-largest Asian market. Mr Olofsson described the latter in May as very promising.

Asia accounted for 8 per cent of sales totalling 86bn last year. Of the 626 stores in the region at the end of 2009, 68 per cent are in China, while Indonesia has 76 stores and Taiwan 65 shops.

There were 40 stores in Thailand, where the group is the third-largest player and 19 in Malaysia where it is number four or five. It is tiny in Singapore with just two stores.

The shares were the biggest riser in the CAC-40 index of leading French stocks, closing 3 per cent higher in a slightly lower market at 33 a share.

Mr Olofsson has said the lion s share of investment will go to the group s four principal markets of France, Italy, Belgium and Spain countries which together account for 70 per cent of group sales and to the fastest-growing emerging markets, including China and Brazil.

The group is implementing a three-year 3.1bn cost savings plan and is to unveil its new-look hypermarkets in the autumn, re-invigoration of which is key to restoring the company to fast growth in the French home market.

Mr Olofsson, a former Nestl senior director became chief executive in January 2009 with a mission from Carrefour s biggest shareholders, Bernard Arnault, chairman of LVMH, the luxury goods group, and Colony Capital, the US private equity group, to turn round the under-performing retailer.

Carrefour to sell fringe Asian stores

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