[credit provider=”AP” url=”http://www.businessweek.com/magazine/once-walmarts-equal-carrefour-falls-behind-10202011.html”]
PARIS (AP) — The head of Carrefour SA is to be replaced by a veteran French clothing retailer after a string of profit warnings sent the French retail giant’s share price tumbling.Lars Olofsson will be replaced by clothing retail executive Georges Plassat at Carrefour’s annual shareholder meeting in June, the company said in a statement. The company said Olofsson had informed its board of directors that he would not seek renewal of his mandate at the general assembly June 18, but no explanation for the decision was given.
The 60-year-old Swede leaves Carrefour, the world’s second largest retailer by sales, in almost the same troubled condition that he found it when he took over the troubled retailer just three years ago.
As then, the company’s performance and strategy are in doubt, the share price is lagging and key shareholders have given up waiting for management’s repeated attempts to turn round the core hypermarkets business to bear fruit.
Carrefour shares plunged 38 per cent last year, well underperforming the wider CAC40 index as the company’s serial profit warnings and missed earnings targets sent investors scrambling for the exits.
Olofsson’s 62-year-old replacement Plassat joins Carrefour from Vivarte, a French fashion retailer he has run since 2004.
In Carrefour’s latest profit warning earlier this month, the company admitted its 2011 earnings would by close to 20 per cent lower than in 2010, as sales stagnated and Olofsson’s much vaunted revamp of the hypermarkets business failed to pay off with improved margins. The group is scheduled to report 2011 earnings on March 8.
Carrefour’s shares were down 2.9 per cent at midday to euro17.74, underperforming the wider market decline as investors shed risk ahead of an anticipated EU summit in Brussels.