Carrefour weighing up options for Brazilian business

Carrefour weighing up options for Brazilian business

Carrefour CEO Georges Plassat today (5 March) indicated the retailer will announce a decision on the future ownership of its business in Brazil next year.

In recent months, there has been speculation Carrefour had hired investment banks to prepare for an IPO of its Brazilian arm but Plassat said the French retail giant had yet to make a decision.

"I insist we will not be doing anything in 2014 but I believe we will be ready in 2015. Whether it be opening up our capital to a local investor, a big investor, whether it be an IPO, whether it be a combination of both, all of that is possible," Plassat said after Carrefour reported its financial results for 2013.

"We will be doing that very coldly. We have always said 2014 will be a good year to pave the way for the future, to get our act together."

Carrefour has quit a number of emerging markets in recent years but remains committed to Brazil, where it said its performance was "excellent" in 2013.

The retailer reported a "remarkable" increase in organic sales in Brazil. Carrefour said its hypermarkets "continued to improve", while wholesale arm Atacadão "consolidated its leadership". On a reported basis, sales in Brazil fell 3.7% to EUR10.86bn (US$14.92bn) thanks to currency fluctuations. Carrefour opened 41 outlets in Brazil in 2013, taking its network of hypermarkets and supermarkets to 241.

An IPO or share sale could provide Carrefour with funds broaden its presence in Brazil but Plassat emphasised what he saw as another benefit - tapping into local consumer demand. "That should help us carry out our policy in an adjusted way, fitted with the country," he said.

Carrefour is the second-largest retailer in Brazil, behind Grupo Pao de Acucar, controlled by French rival Casino.

Plassat said Carrefour's Brazilian results had lagged those posted by GPA but insisted the performance was nonetheless "good".

The Carrefour chief said Brazil would be have a "major role" in the retailer's future and outlined how it would look to further improve its performance.

"We are a multi-format actor in Brazil. We have a historical hypermarket business, it's increasing. We acquired a few years ago [Atacadão], which is improving and perfectly profitable and, finally some 50 supermarkets in the Sao Paulo area, which form a base on which we are thinking of developing convenience stores," Plassat said.

"We perhaps aren't going too fast but we are building for the long term. Brazil has a great potential, we have a formula which is very vigorous, providing we are very selective. The hypermarket will increase market share in relation to comparable stores. We are reviewing their pricing policy, product assortment and commercial environment. In Brazil, we will be doing what we done in France and we are preparing for that company to play a major role in the future."