PARIS — Carrefour, the world’s second-largest retailer behind Wal-Mart Stores Inc., plans to spend 1.5 billion euros, or $1.95 billion at current exchange rates, on its plan to revamp its underperforming hypermarket business, the company said during an “investor day” on Thursday.
The retailer forecast that implementation of the plan, initially unveiled last month, would add 315 million euros, or $409 million, to operating profit before depreciation and amortization by 2013, rising to 650 million euros, or $844 million, by 2015.
“Over the next five years, Carrefour expects a sharp improvement in revenues and profitability, thanks to additional sales from its reinvented stores, strong footprint in key growth markets and significant savings from efficiency gains,” chief executive officer Lars Olofsson stated.
Carrefour has been faced with a drop in consumer spending on durable goods and stiff competition from discount retailers and local supermarket formats. The company plans to convert or remodel 500 stores by early 2013 in France, Spain, Italy, Belgium and Greece as part of the “transformation plan” launched by Olofsson after he joined the group in January 2009.
The group predicted the reinvention of its hypermarket business, which generates half of its revenues in France, would boost overall group sales by 18 percent over the 2010-2015 period.
Setting out its targets for 2015, Carrefour expects group operating profit to rise to 5.2 billion euros, or $6.7 billion, by 2013 and to 6.4 billion euros, or $8.3 billion, by 2015, compared with 2.7 billion euros, or $3.76 billion, in 2009.
It forecasts group sales, excluding gas, will rise to 105 billion euros, or $136 billion, in 2013 and 120 billion euros, or $156 billion, in 2015 versus 79 billion euros, or $110 billion, last year. Historical dollar conversions are calculated at average exchange rates for the period in question.
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