Carrefour appoints Olofsson as CEO and chairman
The board of Carrefour SA approved a plan for Chief Executive Lars Olofsson to also become chairman, putting him alone in the front line of the struggling retailer’s transformation.
Chairman Amaury de Seze commented: “The time has come to reunite the two functions.”
De Seze will still remain on Carrefour’s board.
Olofsson is one year into a multi-pronged three-year turnaround on which his job depends. One step of the transformation was accomplished at the shareholder meeting, when investors approved the spinoff of the Dia discount unit. Dia will be listed on the Madrid stock exchange on July 5, and each Carrefour investor will receive a Dia share for each Carrefour share.
He is also renovating the hypermarket chain in Europe to the tune of EUR1.5 billion, and rolling out thousands of Carrefour-branded groceries. He has faced setbacks in what he calls an “ambitious” plan, including a management shakeup at the core French operations.
The overhaul is necessary to reignite consumer traffic in Carrefour’s French stores, which accounted for 39percent of its 90 billion euros in sales last year. Carrefour is facing stiff price competition from more nimble rivals.
Shareholders at the meeting criticized the influence of Carrefour’s biggest investor, a joint venture between luxury-goods tycoon Bernard Arnault and U.S. private-equity fund Colony Capital, for using all means to prop up the sagging share price. In particular, shareholders raised questions about the risk of selling off operations in booming emerging markets.
Olofsson sought to reassure investors that emerging markets are central to Carrefour’s growth prospects. He said Carrefour’s ambition is to be a leader in countries such as China, Indonesia and Brazil, where it has hundreds of hypermarkets.
Carrefour intends to keep majority control of its operations in Brazil. The French retailer has been in discussions with the chairman of Brazilian retailer Companhia Brasileira de Distribuicao to possibly merge their operations in Latin America’s largest economy.
De Seze said the board and management “will take our responsibility” if they don’t meet their targets in the next two years.
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