French retailer Leclerc is to up the stakes in its cooperation with Italian counterpart Conad.
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Last year the two groups signed a preliminary agreement. Now they have firmed up plans for a joint venture which will set up a chain of hypermarkets in Italy. The venture will cost Lit600-700bn (US$269-314m) and see the establishment of approximately 20 stores. It will be headed up by Ugo Baldi and trade under the name Conalec SrL. It will be controlled 60% by Conad and 40% by Leclerc.
Italy is widely considered to be one of very few large European retail markets that has yet to succumb to large-scale consolidation. Leclerc will find many of its domestic competitors got to Italy first, for example Carrefour and Auchan, which recently finalised a collaboration partnership with Italian retailer Rinascente.
The move into Italy is viewed as Leclerc’s most significant venture onto foreign markets thus far, although the company already has operations in Croatia, Poland, Portugal, Slovenia and Spain.
Conad’s preliminary 2001 sales rose 8% to €6.58bn (US$5.7bn) and it forecasts that 2002 sales will climb a further 10%. Leclerc meanwhile, expects 2001 sales to rise to €25bn from €23.78bn in 2000.
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