Carrefour to cut up to 600 jobs in three years

CARREFOUR PLANS to cut as many as 600 administrative jobs in France as part of a three-year plan formulated by chief executive Georges Plassat to turn around the world’s second-largest retailer.

The redundancies would be voluntary and were “essential”, Mr Plassat said at a presentation in Paris, after the company reported a smaller-than-expected decline in first-half profit, which boosted shares.

Carrefour would also review businesses in markets such as Poland, Turkey and Indonesia, where local chains were better placed, said Mr Plassat, who took over from Lars Olofsson in May. The retailer announced plans to leave Singapore, where it has two stores, by the end of the year, this week after earlier agreeing to sell its Greek business to its local partner.

“We can’t spread ourselves too thin,” said Mr Plassat, calling for “vigilant” cost control across the business. Carrefour needed to generate cash flow and cut the amount and cost of debt, he said.

The stock rose as much as 12 per cent, the most in more than two decades and the biggest gain in the Stoxx 600 Index, after Carrefour said recurring operating income fell to €769 million from €838 million. Mr Plassat is seeking to revive the retailer as Europe’s debt crisis weighs on consumer spending and it struggles to attract shoppers to its largest stores.

His plan also includes giving more control to store managers, focusing advertising spending locally and online and maintaining low prices for food.

Carrefour, which has lowered its outlook for profit five times in the past two years, remained comfortable with consensus estimates for full-year earnings before interest and tax of as much as €2.09 billion, excluding Greece, chief financial officer Pierre-Jean Sivignon said.

Recurring operating income advanced 10 per cent in Latin America and fell 4.1 per cent in Asia because of wage inflation, Carrefour said. Profit declined 32 per cent in Europe, excluding France, suffering from weakening economies, especially in the southern part of the region.

Carrefour, which in March halted a €1.5 billion plan to remodel some of its largest European stores, remained committed to businesses in mature markets, Mr Plassat said. – (Bloomberg)