Struggling Carrefour to cut costs and staff
Source: Agencies |
August 31, 2012, Friday
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CARREFOUR is to cut staff and costs but not corners in its model of offering everything from vegetables to dishwashers under one roof, the French retailers' new CEO Georges Plassat said yesterday, as it unveiled a first-half loss of 31 million euros (US$39 million).
Europe's largest retailer by sales has struggled in recent years. Carrefour has been hit hard by the economic crisis but also by several miss-steps by previous management that led to rising costs, higher prices and an unsuccessful plan to rebrand some stores as high-end. Plassat was called in earlier this year from French retailer Vivarte to turn round operations - not the first time the firm has tried to reverse course in recent years.
Known as "Georges the Cleaner" for his penchant for ruthless cost-cutting, Plassat did not disappoint yesterday at his first presentation of results as the company's CEO. He promised to root out waste, to cut 500 to 600 jobs with a buy-out plan and to rethink compensation with an eye to reducing bonuses - all while drawing laughs from analysts and journalists for his biting if oblique references to the follies of his predecessors.
As Plassat outlined his vision for the company, he vowed not to cede on what he called the raison d'etre of the company: providing one-stop shopping in large hypermarket stores. He repeatedly said the company needed to retrench and simplify in the areas where it has historically succeeded: providing low prices in big box stores that are generally outside cities.
That is a marked departure from recent group strategies that have included putting corner stores in cities and trying to pitch some Carrefour stores as more upmarket, under the brand Planet. He promised to throw out that brand and seemed particularly vexed by its English spelling and by the practice in recent years of the company's foreign executives to hold presentations for analysts in English. Carrefour would not relinquish its "French character," Plassat vowed.
His Frenchness is seen as one of his biggest assets. He replaced Lars Olofsson, who is Swedish. James McCann, an Englishman, had been in charge of the stores in France briefly under Olofsson.
Europe's largest retailer by sales has struggled in recent years. Carrefour has been hit hard by the economic crisis but also by several miss-steps by previous management that led to rising costs, higher prices and an unsuccessful plan to rebrand some stores as high-end. Plassat was called in earlier this year from French retailer Vivarte to turn round operations - not the first time the firm has tried to reverse course in recent years.
Known as "Georges the Cleaner" for his penchant for ruthless cost-cutting, Plassat did not disappoint yesterday at his first presentation of results as the company's CEO. He promised to root out waste, to cut 500 to 600 jobs with a buy-out plan and to rethink compensation with an eye to reducing bonuses - all while drawing laughs from analysts and journalists for his biting if oblique references to the follies of his predecessors.
As Plassat outlined his vision for the company, he vowed not to cede on what he called the raison d'etre of the company: providing one-stop shopping in large hypermarket stores. He repeatedly said the company needed to retrench and simplify in the areas where it has historically succeeded: providing low prices in big box stores that are generally outside cities.
That is a marked departure from recent group strategies that have included putting corner stores in cities and trying to pitch some Carrefour stores as more upmarket, under the brand Planet. He promised to throw out that brand and seemed particularly vexed by its English spelling and by the practice in recent years of the company's foreign executives to hold presentations for analysts in English. Carrefour would not relinquish its "French character," Plassat vowed.
His Frenchness is seen as one of his biggest assets. He replaced Lars Olofsson, who is Swedish. James McCann, an Englishman, had been in charge of the stores in France briefly under Olofsson.
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