French retailer Carrefour may need up to EUR 3 billion to fund a revival plan for its European hypermarkets, money which could be raised by pulling out of several markets including Indonesia, Turkey, Poland, Romania, Malaysia, Taiwan and Singapore writes Reuters. Britain’s Tesco, France’s Auchan and U.S. giant Wal-Mart are seen as potential buyers of eastern Europe assets.
Another possible option would be the partial listing of its emerging-market businesses, notably profitable Latin America, according to the same source.
Carrefour declined to comment on the matter, says Reuters.
Starting May, Carrefour has a new CEO, Georges Plassat who is expected to come up with a plan to reverse years of underperformance in Carrefour’s European markets. His recovery plan could be revealed on Aug. 30 with first-half results.
Some of the challenges the new CEO faces include halting the market share drop inFrance, where it makes 43 percent of sales, cutting debt and weathering a difficult economic climate in Italy and Spain, where it makes just under 20 percent.
“Plassat’s arrival has raised hopes that Carrefour’s hypermarket format, which has been hit by competition from specialist stores and online shopping, will survive,” writes Reuters.
The retailer has already closed its operations in recession-hit Greece this June and pulled out of other markets including Japan, Mexico, Russia and Thailand in recent years.
Plassat has made clear the retailer will keep its business in Brazil and China, but analysts expect disposals in Indonesia, Turkey, Poland, Romania, Malaysia, Taiwan and Singapore to follow, with proceeds between EUR 1 billion and EUR 3 billion.
It is for the second time this year when the rumors about a possible exit from Romania have surfaced. According to information published earlier In April on www.retaildetail.eu which quotes an ING report, Carrefour was rumored to exit up to nine countries this summer due to unsatisfactory results. These 9 countries were Argentina, Belgium, Greece, Italy, Malaysia, Poland, Romania, Taiwan and Turkey. Carrefour Romania did not comment the information at that time.