Carrefour Update

I am still very bullish on Carrefour although the shares have risen from where I first recommended them I think they are still a bargain up to E25. The article below from an industry magazine shows how the new CEO is being viewed. Plassat seems to be very focused and I like his opening moves.

Georges Plassat’s appointment as Carrefour SA (CA) Chief Executive Officer was welcomed by analysts and investors because of his retailing experience. Six months into the job, he’s proving a savvy dealmaker as well.

Plassat’s dealmaking has already started to reverse a five- year slump in Carrefour’s shares as expectations that he will deleverage the retailer’s balance sheet increase. After falling 17 percent in the first half of 2012, Carrefour’s stock has risen 30 percent since the end of June, bringing the company’s market value to about 12.8 billion euros.

Carrefour is “a buy for Plassat’s ability to create shareholder value through portfolio rationalization and the opportunity to improve the core French business,” said Caroline Gulliver, an analyst at Espirito Santo in London.

Carrefour has been losing market share in France, where it gets about half of sales, as shoppers shun the retailer’s out- of-town superstores for rival outlets, often closer to home or online, that are perceived to offer better value for money.

To combat this and boost margins in Europe that are the lowest in at least a decade, Carrefour’s fourth CEO in eight years has prioritized generating cash and cutting debt. His plan includes exiting overseas markets the retailer doesn’t dominate.
Plassat “is more his own man,” said Cantor Fitzgerald’s Dennis. “What he’s achieved in such a short period of time is not to get involved with the puppet strings of the major shareholders.”