Carrefour denies China exit plans

Slides
Photos

By Yu Tianyu (China Daily)
Updated: 2009-10-13 08:09

Carrefour, the retail giant, lost about 58.1 million euros in the first half of 2009.[CFP]

Carrefour, the world's second largest retailer by sales after Wal-Mart Stores Inc, denied that it plans to pull out of the Chinese market because of losses it experienced since the outbreak of the global financial crisis.

Chen Bo, spokesman for Carrefour China, told China Daily yesterday that it was rumor without substance.

"As Carrefour's CEO Lars Olofsson said on his trip in China last month, Carrefour is optimistic about the Chinese economy and thinks highly of the potential for the Chinese market," Chen said, adding that the French retail giant would continue its plan to open 20 to 25 new outlets each year in China.

The retail giant lost about 58.1 million euros ($ 85.90 million) in the first half of 2009, according to its interim business report. In the same period last year, Carrefour reported 744 million euros in profits.

French daily Le Monde previously reported that Carrefour was considering selling its operations in Latin America and Asia under pressure from top shareholders.

Carrefour's biggest shareholder - a partnership between LVMH chief Bernard Arnault and private equity firm Colony Capital LLC - has lost about 1 billion euros on its investment.

Rumors that Carrefour is exiting the Chinese market were sparked by the fact that Wal-Mart and RT-Mart have both exceeded Carrefour in terms of total store numbers and single store sales revenue in China.

Carrefour responded that it had not changed its strategic plans since March, adding that its strategy had the full backing of its board of directors.

Carrefour said in a statement that its geographic priorities in the medium and long term were still growth markets, particularly China and Brazil.

However, officials from Carrefour's headquarters haven't given any direct comments on whether top shareholders would sell their interests in China or not.

Last month, Olofsson said in an interview with China Business News that the company would intensify integration of its overseas operations and it has sold or closed down a part of its operation in Italy that showed weak business performance.

In 2005 and 2006, Carrefour quit Japanese, South Korean and Mexico markets because of "unsmooth operations" in these countries, through selling the operations to local enterprises.

Alex Liu, retail analyst with market research firm Euromonitor International, said: "It is not very likely that Carrefour's large shareholders would sell their Chinese interests because, looking at Carrefour's market performance in China, it was unnecessary."

(For more biz stories, please visit Industries)