Carrefour picks retail veteran for new turnaround bid

Mon Jan 30, 2012 6:57am EST
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By Dominique Vidalon

PARIS (Reuters) - Carrefour (CARR.PA: Quote), Europe's largest retailer, picked industry veteran Georges Plassat as its next boss, signaling key shareholders may back another attempt to fix its ailing hypermarkets rather than push for a break up.

Plassat, the 62-year-old head of private equity-backed retailer Vivarte, will replace Lars Olofsson, who faced mounting criticism over a series of profit warnings that hammered the French group's shares down 43 percent over the past year.

"The reference shareholders have been hesitating between restructuring the group or breaking it up. Plassat is the man of a restructuring," said one analyst who declined to be named, referring to Carrefour's top investors -- French tycoon Bernard Arnault and U.S. private equity firm Colony Capital.

Speculation has long swirled that Olofsson's departure could herald the break up of Carrefour, with the possible sale of its faster-growing emerging market businesses.

"Carrefour has lost the confidence of its managers, staff, suppliers and shareholders. Appointing a respected retailer at its helm polishes up the image of the board, which some critics have accused of conducting a short-term financial strategy," CM-CIC analyst CM-CIC analyst Christian Devismes said.

Carrefour, the world's second-biggest retailer behind U.S. group Wal-Mart (WMT.N: Quote), has been struggling for years, partly due to its reliance on hypermarkets, which have been losing out as time-pressed shoppers buy more goods locally and online, and prefer to purchase general merchandise from specialist stores.

Olofsson's main response was Carrefour Planet, a costly revamp of the stores that has so far not yielded the necessary results and is likely to be scaled down in March amid a worsening economic climate.

A new CEO might pursue an alternative strategy for the hypermarkets, like downsizing them, slashing prices to lure back cash-strapped shoppers who think that Carrefour products are too expensive and investing more in e-commerce, analysts said.   Continued...

<p>A woman walks below the logo of Carrefour Planet supermarket in Bordeaux, southwestern France, January 19, 2012. REUTERS/Regis Duvignau</p>