March 16, 2012

Adieu Carrefour CEO Lars Olofsson

Lars Olofsson, CEO Carrefour (photo: Carrefour)
Lars Olofsson: "I think it better to leave the answer to your question to the new team"
Departing CEO & Chairman Lars Olofsson was gently licked by retail analysts and financial journalists in Paris last week following his presentation of the Carrefour's annual results for 2011. Despite a 13.6 per cent reduction in net debt to €6.9bn, and above-target cumulative cost savings of €1.5bn, they should have savaged him like pit bulls. After five (!) profit warnings last year, ebitda at the French retail giant declined 11.3 per cent to €3.9bn. Net income "affected by significant one-off elements" fell by 14.3 per cent to €371m. Meanwhile net sales remained virtually stagnant at €81.3bn (plus 0.9 per cent). Ominously, Olofsson attributed these figures to “external and internal problems”.
March 9, 2012

Walmart ante portas

Juan Roig, CEO Mercadona (photo: Mercadona)
Mercadona CEO Juan Roig: Is he being courted by Walmart?
Sometimes it is hard to believe one’s own research or what informants are telling you: Walmart would seem to be actively negotiating a return to Western Europe. According to reliable and independent sources, the world’s largest retailer by sales is in talks with Spain’s leading retailer Mercadona as well as with Italy’s foremost hypermarket operator Esselunga. One also hesitates to print, when Mercadona’s head of press denies the above (“You are barking up the wrong tree.”), Walmart, as usual, refuses to comment, and no answer has been received from Esselunga to date. As, furthermore, Lebensmittel Zeitung’s sources do not wish to be named, it is only possible to assess how probable the above story might, or might not be, and to explore the potential logic behind any such discussions.
March 9, 2012

UEFA Euro 2012 opens up Ukraine retailing

UEFA Euro 2012 Ukraine (photo: LZ-Archiv)
Symbol of hope: Not just retailers stand to benefit from the Ukraine co-hosting UEFA Euro 2012
For some in the Ukraine, football is not just "the beautiful game". In a country which limits the right of its own citizens to travel to the West, but allows its oligarchs an insolent and oppressive liberty, co-hosting UEFA Euro 2012 surely means something more than increased retail sales. UEFA does not only lighten the daily load and the hearts of the common people; it is also the chance to open both markets and minds towards new possibilities of the human spirit. Lebensmittel Zeitung asked three experts intimately connected with this facinating country to what extent this year's soccer could change the climate for retail investors. Foxtrot CEO Uwe Klenk, Rewe International Board Member Janusz Kulik, and management consultant Peter Györffy are western pioneers who remain committed to growing their businesses there.
March 9, 2012

Biedronka CEO Pedro da Silva talks Polish retail

Folder football cover (photo: Biedronka)
Top of the league: Biedronka is official sponsor of the Polish national football team
Although he chooses in an interview with Lebensmittel Zeitung to downplay Biedronka's role in the forthcoming UEFA championship, Pedro Pereira da Silva, COO of Portuguese parent company Jerónimo Martins, is a clever tactician. As official sponsor of the Polish national football team, Biedronka not only underlines its market leadership with over 1,900 outlets throughout the country. This also makes the discounter seem more Polish than the Poles themselves. One could think of no better way to enhance one's imae and celebrate the tremendous identity the company has forged with the interests and emotional needs of local customers. Jerónimo Martins Chairman Alexandre Soares dos Santos has already revealed some of the secrets behind the Lisbon-based family company's improbable success in a far-away country. For instance, Portuguese managers assigned to Biedronka are required to take their families with them and are obliged to stay in Poland at weekends. So there is none of this "how-can-we-jet-away-as-quickly-as-possible-from-this-place" attitude too frequently witnessed among managers at many other international retailers.
March 1, 2012

Albert Heijn plans German convenience stores

AH to go (photo: Ahold)
AH to go: Let's hope the Germans like sandwiches
Dick Boer could have done so, but he didn't. Ahold's ultra-cautious CEO gave no hint at the presentation of the annual results yesterday as to when the Dutch retail giant will be entering the German convenience market. Instead, we were told about an admittedly creditable performance which has outfaced the current financial crisis: 2011 net sales gained 5.5 per cent at constant exchange rates to €30.3bn, and net income jumped 19.2 per cent to just over €1bn. The reticence about the entry into Germany really wasn't necessary though. After all, everyone is shouting from the rooftops that the Flying Dutchman of international retailing will be opening in the Dusseldorf/Cologne area this August.
February 24, 2012

German retailers stay in Greece

Lidl Greece advertising
Solid as Mount Atlas: Lidl's 220 Greek discount outlets beat the company's average store revenues in Germany
Like Spartan warriors on the narrow coastal pass of Thermopylae, Lidl, Metro and Praktiker refuse to abandon their posts as Greece fights again for its very existence. Despite a seemingly endless saga of economic woe, and much-publicised anti-German feeling, all three retailers confirmed that they have no plans to exit the country in its hour of need. During the current crisis, food retail sales in Greece have probably declined by an average of more than 20 per cent, and non-food lines such as shoes or household goods only byslightly less. German retailers have been not been affected quite so severely, but will clearly have taken a painful hit on their 2011 revenues. Although labour costs will presumably have fallen, this is a brave decision in view of the unforgiving terrain. In addition to excessive bureaucracy and rampant corruption, there has also been vandalism to stores, and considerable disruption to deliveries has caused frequent out-of-stocks.
February 23, 2012

What Walmart didn't say at the AGM

Mike Duke, President & CEO Walmart (photo: Walmart)
Mike Duke: "Every segment of our business is stronger than it was a year ago"
This Tuesday in Bentonville/Arkansas, President & CEO Mike Duke and his chummy management team obviously didn't want to set off any firecrackers. In fact, there were no surprise announcements to make regarding Walmart's annual results for 2011/12. As expected, we heard all the usual superlatives, but with surprisingly little corporate gush. Even the word "great", almost irresistible for American businessmen, fell less frequently than in the past. True to form, the top dogs at the US retail behemoth said everything they were legally and ethically obliged to. They certainly met SEC regulations and, despite a temporary 4 per cent decline in the share price, probably also most analyst expectations. There were even perfunctory updates on sustainability and other politically-correct topics. But what Duke didn't mention in his folksy, southern drawl is what interests us today.
February 17, 2012

Schlecker's foreign drugstore empire

Lars Schlecker, son of Schlecker founder (photo: Thomas Fedra)
Lars Schlecker: "No foreign subsidiary will be made to file for insolvency"
CEO Lars Schlecker made some bullish statements last week on the financial health of the foreign operations at Schlecker, the insolvent German drugstore group. "No foreign subsidiary will be made to file for insolvency," said the son of the founder. Schlecker Austria, whose results also include Poland, Belgium, Luxembourg and Italy, received his particular praise. "Austria is our best country, which without question will not be sold." Lars Schlecker also claimed that the Austrian division posted a "seven-digit" operating profit last year and that all its national subsidiaries are in the black. Really? We doubting Thomases have had a hard time trying to check the accuracy of these statements. Group structures are opaque, and the main operating arm was run by founder Anton Schlecker as a "sole trader".
February 10, 2012

Erwin Müller paralyses Douglas Holding

Douglas store facade (photo: Douglas)
Alluring scent: A battle is raging for the control of the "Douglas" perfumery chain in Europe
Anyone for poker? Douglas, the health & beauty-cum-lifestyle group, remains in turmoil as it tries to rid itself of an unwanted host, competitor Erwin Müller. Swabian patriarch Erwin Müller, who already holds a stake of around 10.8 per cent in the retail multiple, was always a strange and uncongenial bedfellow for Douglas. However, suave and patriarchal Douglas Chairman Jörn Kreke as well as son Henning, CEO, have always been at pains to deny this in public. Behind the scenes, the Krekes, who pool around 12.7 per cent of Douglas's shares, are said to be looking for external investors in order to increase their holding in the company. It is also believed that they are exploring what it would cost them to take Hagen-based Douglas plc private.
February 3, 2012

German drugstore Schlecker's darkest hour

Anton Schlecker, founder Schlecker (photo: Schlecker)
Drugstore baron: Anton Schlecker in happier days at the height of his power in 2000
Meike Schlecker looked tired and nervous at this week's press conference as she strove to defend family honour. The daughter of Anton Schlecker, founder of Europe's once largest, but now insolvent drugstore empire, was at pains to stress that her family had not siphoned money away from the business. Meike Schlecker (38) also claimed that the family had invested a "three-figure million" sum in trying to restructure the business so that there was no longer "anything there" by way of personal fortune for insolvency administrators to claim. Lebensmittel Zeitung estimates that Schlecker has accrued losses of at least €250m ($328m) in Germany over the past four years. Good on a daughter for speaking up for a father, but Schlecker is no longer a family affair. The man firmly in charge at the helm of the Ehingen-based drugstore empire is now temporary insolvency administrator Arndt Geiwitz.