Carrefour Considers a Stand-in Boss

Carrefour SA, Europe's largest retailer, hired headhunters to seek a replacement for Chief Executive Officer Jose Luis Duran and a European businessman was approached, according to the Financial Times.

A Paris-based spokesman for Carrefour's board, who declined to be further identified, denied that a search firm had been engaged. Duran was removed from the board at a meeting last Monday, Bloomberg News reported.

The supermarket owner's directors are divided on Duran's future, with some saying he should be given six months to turn the company around, according to the FT, after its stock declined 39 percent this year.

Duran was dropped from the retailer's new 12-member board at the extraordinary shareholders meeting. Carrefour's biggest investors, Bernard Arnault and Colony Capital LLC, are seeking greater control and gained three board seats at the meeting.

If the board wants a new strategy it will be a strong indication that Duran may be replaced, said Emmanuel Soupre, a fund manager at Neuflize OBC Asset Management in Paris. The company has had a problem for a long time about where to position itself in the French market.

Carrefour is confronting a deep and durable global economic crisis as food consumption stagnates or falls, Chairman Amaury de Seze said at the meeting last Monday. First-half operating profit increased 5 percent, less than the 7-percent growth Carrefour had forecast for sales and earnings.

Confidence drop

Consumer confidence in France, where the supermarket owner generates almost half its sales, fell to a record low in June, prompting Carrefour to reduce profit and sales targets.

Besides offering more discounts, the company has said it will accelerate opening new stores in faster-growing markets such as Brazil.

Carrefour fell 1.7 percent to 32.37 euros in Paris trading on Sunday, valuing the company at 22.8 billion euros (US$35.5 billion).

The company is the second-worst performer in the nine-member Bloomberg Europe Food Retailers Index, which has dropped 30 percent this year.

Arnault, the billionaire French chairman of luxury-goods maker LVMH Moet Hennessy Louis Vuitton SA, and Los Angeles-based Colony own 13.6 percent of Carrefour through Blue Capital, an investment vehicle.

The new 12-member board of Carrefour replaced a nine-member supervisory board. The retailer says the change was aimed at speeding up decision-making.

At the shareholders meeting, Duran was named to run a team of executives to oversee strategy. Arnault and Colony have raised their stake in the retailer since the Halley family, with 13 percent, dissolved a shareholding pact, allowing individual members to sell their stock.

Arnault in May took the board place of Robert Halley, the last member of the founding family to hold a seat.

 

Source: CRIEnglish