In the Spotlight - José Luis Durán, Carrefour
Unlike many of his peers in the retail business, Carrefour boss José Luis Durán is confident about his company's prospects for the year ahead. But, as Dean Best writes, Carrefour's performance in France will define whether Durán's optimism is well-founded - or misplaced.
Looking for a sign of optimism in the retail sector? Cast your eyes to Paris.
While retailers brace themselves for the dual impacts of weak consumer confidence and food price inflation, French giant Carrefour is looking ahead with some confidence.
The origins of this self-belief can be traced back to 2005 when José Luis Durán became the company's chief executive. Durán was offered the top job after six years at the world's second-largest retailer and the 43-year-old began building Carrefour's presence in high-growth markets and selling off under-performing businesses.
However, some in the market believed the former auditor was not acting quickly enough. Last year, French billionaire Bernard Arnault teamed up with private equity firm Colony Capital and bought just under 10% of Carrefour.
Rumours abounded that Arnault was going to take a more active role in the company's strategy and speculation grew that Durán could be pressured to sell off Carrefour's property portfolio to boost returns to shareholders.
In August, Carrefour announced it was to sell off part of its property portfolio through an IPO slated for next year. Investor pressure, it appeared, had paid off. The credit crunch may have postponed plans for an IPO but Carrefour insists it has alternative plans to unlocking the value in its real estate.
Nevertheless, Durán should receive some plaudits for his focus on building Carrefour's presence in markets from China to Colombia. Earlier this week, Carrefour issued healthy sales for 2007 and its international business provided the bulk of the company's growth.
With an acquisition in Indonesia also secured this week - and signs that a deal to break into the much-coveted Indian retail sector is just around the corner - Durán's assertion that 2008 will be a "breakthrough year" for Carrefour looks to be a responsible one.
However, whether Durán's upbeat mood lasts until the end of the year depends on Carrefour's performance back home. The chief executive is looking to rebuild Carrefour's domestic business around its namesake brand and the company has talked of "making the brand work harder".
Carrefour saw its French sales accelerate in the last three months of 2007 as food price inflation and the rising cost of fuel boosted sales. But, with French consumers becoming increasingly concerned about the cost of living, Carrefour's ability to boost revenue just by upping prices could be limited.
Durán rounded off a busy week by appointing seasoned Carrefour executive Gilles Petit to the newly-created role of managing director for the company's French operations. Petit has enjoyed success with Carrefour's Spanish stores and Durán will be hoping his colleague can repeat those achievements north of the Pyrenees.
When Durán took charge of Carrefour three years ago, some believed he had a mountain to climb. He may now feel that the summit is in reach.
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