PARIS — Carrefour’s chief executive, Lars Olofsson, on Tuesday disclosed a three-year plan to overhaul the world’s second-largest retailer, achieve sizable savings and improve its image, which consumers have come to perceive as an expensive brand compared with competitors.
By 2012, the company expects to achieve savings of 4.5 billion euros, or $6.32 billion at current exchange rates, by improving the efficiency of its operations to generate higher margins, mainly in France, Italy, Spain and Belgium.
The gains will consist of 3.1 billion euros, or $4.35 billion, by cutting operating costs and improving purchasing practices, and 1.4 billion euros, or $1.96 billion, of further gains from reducing inventory times by seven days.
The transformation will require an investment of 500 million euros, or $702 million, and will entail one-off expenses of around 1 billion euros, or $1.4 billion, between 2009 and 2012.
“The large cost savings and efficiency gains resulting from these initiatives will give us greater resources to pursue our ambitions,” stated Olofsson.
The company also underscored its resilience against the sharp economic downturn by disclosing first-half sales excluding gasoline should be slightly higher compared with the same period last year, and the increase in the second quarter of 2009 should be above that of the first quarter.
Carrefour expects to focus on promoting its prices using advertising campaigns with clear price messages and price comparisons in a bid to attract more budget-conscious shoppers in the current downturn, according to the company.
The retailer has already tested the strategy in Spain with success, logging market share gains and improving its image among consumers, Olofsson said.
As a result, the company is rolling it out in France in September 2009. Taking a cue from U.K. supermarket chains, which have boosted their business with city-center stores to lessen their reliance on hypermarkets, Olofsson said the rollout of the Carrefour City convenience stores will continue, after test stores showed a growth of 30 percent after they were converted into this format. Carrefour expects to have 50 Carrefour City and Carrefour Contact stores, which are located in smaller towns, open by yearend.
There was no specific mention about the firm’s strategy for apparel, health and beauty products and other nonfood categories.
The world’s second-largest retailer behind Wal-Mart, Carrefour operates about 15,000 stores under several banners — including Carrefour hypermarkets, Champion supermarkets, Shopi and Marché Plus convenience stores, and discount stores Dia and Ed — in about 30 countries in Europe, Latin America, and Asia. France accounts for about 45 percent of its sales.
Carrefour is also reshuffling its business in Italy, where it has closed two hypermarkets, by refocusing on the more profitable northern regions. As a result, it will sell four hypermarkets it owns in southern Italy, Olofsson said.
Swedish-born Olofsson joined the company Jan. 1, replacing José Luis Duran, who had been under pressure to improve the company’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 investment firm Colony Capital.
Shares closed down 3 percent at 30.42 euros, or $42.73, before Carrefour disclosed its current trading and cost-savings plans.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)