Carrefour checks out of Greece
Filed under: News
The French company - it has seen first quarter Greek sales spiral 16% - has confirmed is flogging its joint venture stake to partner Marinopoulos, which will retain franchisee status. How big a deal is the move?
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Symbolically it's certainly significant, not to say hugely disruptive for the French retailer. Carreflour has more than 40 hypermarkets in Greece. However Greece makes up only a very small part of Carrefour's total revenues - around 3%. But the exit cost includes a $220 million charge to the Carrefour Group.
It's likely many other international companies are plotting similar exit plans. Carrefour is likely to look toward South America, specifically Argentina where it already has strong synergies. Its new CEO, Georges Plassat, hasn't made clear his plans for the company yet, though shareholders will get an update next week.
Nail-biter electionCarrefour's shares have climbed 1.68% since its Greek announcement earlier today. Greece meanwhile sees cliffhanger parliamentary elections this weekend. Far-left party Syriza has committed itself to ripping up a loan agreement with the EU Union and IMF.
If Greek anti-austerity lobby win, some renegotiation of its IMF and EU loans may be attempted, though this will not go down well in Germany.
But if little repayment - even a freeze - is attempted then investors could quickly lose confidence in other European countries also to repay their own debts, such as Spain or Italy. And if nervous retail investors also start taking their cash out, then many banks will become weaker still.
Many multi-national European businesses will be watching the Greek election results this weekend very closely. Has an exit stampede out of the country properly commenced?
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