Metro Group's Asian headache
Metro CEO Olaf Koch: "No one is euphoric here"
After all, the German retail giant's C&C business was generally such a cash machine that it could afford to sub out the odd weak link in an otherwise golden chain.
As earnings have fallen and look set to stagnate, those days are probably gone for good. Cost-efficiency is now the name of the game at head office in Dusseldorf.
This makes it a field day, of course, for accountants and apparently also strategic consultants Alix Partners as they run their slide rule dispassionately over every national operation.
This is denied by Metro who merely confirms that Alix Partners are reviewing the organisational structures of Metro Properties.
No new exits announced
It is also only fair to state that CEO Olaf Koch made no reference to exiting any further countries during his recent presentation of the group's H1 figures. Koch, who expects revenues to rise and earnings to match previous levels, also confirmed full-year guidance for 2012.
So where does this leave us merchants of rumour and scandal after Metro's recently announced departure from the UK?
As Metro raises this year's cost-cutting targets, an overall decrease in first-half group earnings was caused by losses in Germany, Western Europa and Asia.
In an annus horribilis which saw €172m written-off in the UK and €68m provided for liabilities and restructuring charges, profit was essentially only generated in real estate and Central & Eastern European operations.
Asia is interesting in that revenues continued to increase during H1, while losses (€24m) nearly doubled in the region against the same period last year (€13m). Although China remains important, the pressure to exit Vietnam and Japan, for instance, must surely be increasing.
Last year, Metro defined eight strategic markets for the future: Germany, France, Italy, Poland, Russia, Spain, Turkey and China. At least a question mark could now be placed over the remaining 20+ countries within its vast global portfolio.
Related article in German: Lebensmittel Zeitung, no. 31, 03.08.2012, by Hans-Jürgen Schulz
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