Carrefour Ousts CEO

Paris Carrefour SA announced Tuesday that it will terminate CEO Jose Luis Duran, effective Jan. 1, and replace him with a former top manager at Switzerland's Nestle SA, Lars Olofsson.

The move is a culmination of long-simmering tensions over the French retail giant's performance and strategy.

Speculation over Duran's future at Carrefour has mounted since last year when the company's long-standing top shareholder ceded its position to a consortium controlled by French billionaire Bernard Arnault and a U.S. private-equity firm, Colony Capital.

In July, shareholders had voted to change the company's management structure, creating a board which excludes Duran.

Blue Capital, the consortium controlled by Arnault and Colony Capital, last year took a 9.1% stake in Carrefour and urged the company to unlock the value of its real estate.

"It's not much of a surprise; it's been a long time that Jose Luis [Duran] was under pressure," said Christopher Hogbin, senior retail analyst at BersteinResearch in London.

Investors will be reassured by Olofsson's appointment because of frustration over the slow pace of change at Carrefour, Hogbin said. But a change of CEO is no cure-all for the company's problems, he added.

"Carrefour still has the problem that it has (now): lots of hypermarkets in France—hypermarkets are a low- or no-growth format," Hogbin said.

Last month, Carrefour reported third-quarter sales were up 7% at 24.7 billion euros ($31.6 billion), lifted by growth in its French hypermarkets business and continued strength abroad.

Carrefour has been aiming to achieve sales growth at constant exchange rates of 7% for all of 2008—in line with its performance last year.

In its statement Tuesday, Carrefour said Olofsson was the "ideal leader for Carrefour to carry out the next stage of the group's development."

Olofsson has previously held top positions at global food giant Nestle, most recently as executive VP for strategic business units, Carrefour said.

Recommended stories

Login or Register to post a comment.