PARIS — In a change of command at the world’s second biggest retailer, Lars Olofsson will succeed José Luis Duran as group chief executive officer at Carrefour, effective Jan. 1.
Olofsson, 56, who is currently executive vice president of the Nestlé Group, responsible for strategic business units, marketing and sales, has more than 30 years’ experience at the Swiss food giant.
“His strong leadership and sales and marketing expertise make him the ideal leader for Carrefour to carry out the next stage of the group’s development,” stated Amaury de Sèze, chairman of Carrefour’s board of directors.
Duran, chairman of Carrefour’s management board since 2005, will leave the retailer after 18 years following a transition period. Duran, a Spaniard, had been under pressure to improve Carrefour’s financial performance and limping stock price from its largest shareholder, Blue Capital Group, the investment consortium of LVMH Moët Hennessy Louis Vuitton chief Bernard Arnault and Colony Capital.
Olofsson, a Swede, will arrive at Carrefour at a challenging time. He will be faced with flagging consumer confidence in France, the retailer’s largest market, and the challenge of effectively building business abroad.
Carrefour, with 2007 revenues of over 82 billion euros, or $103 billion, has consistently disappointed the market with its results recently. Wal-Mart Stores Inc. is the world’s biggest retailer with more than $350 billion in 2007 revenue.
Speculation first surfaced in July that Arnault and Colony were eager to replace Duran as the chain continued to experience sagging sales and the share price came under pressure.
Carrefour’s stock has slid from above 53 euros a share in January. The stock rallied more than 5 percent on news of Olofsson’s arrival, but backtracked over the day to close up 3.5 percent to 30.86 euros, or $38.57 at current exchange, in trading on the Paris Bourse.
Duran came under fire early this year when he unveiled plans to switch the company’s Champion supermarkets in France to the Carrefour Market brand. He was also forced to slash Carrefour’s profit guidance.
In an extraordinary shareholders meeting in July, Duran was ejected from the management board but retained the title of ceo. At the same time, Arnault and Colony were given an additional three seats on the board from which to assert their authority. Blue Capital holds 13.5 percent of Carrefour’s shares.
Since Duran took over in 2005, he has tried to streamline business by selling unprofitable operations in countries like Switzerland and Portugal to funnel more capital to expansion in fast-growth markets from Poland to China. His efforts have had mixed success. Carrefour reported a sales increase of 6.8 percent in the third quarter, helped by better business in French hypermarkets and stronger international business. But third-quarter growth at French hypermarkets was driven by heavy promotional activity, which is expected to weigh on Carrefour’s profits.
Duran was appointed ceo in 2005 after a management shake-up ousted former ceo Daniel Bernard. Blue Capital purchased a joint 9 percent stake in Carrefour in 2007. Longtime Carrefour investors, the Halleys of France, dissolved a shareholders pact in April that cleared the way for Blue Capital to raise its stake enough to become Carrefour’s controlling shareholder.�
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