* Carrefour to sell stake in Greek joint venture
* Will take 220 mln euro non-cash charge
* Former JV partner will be a Carrefour franchisee
* Carrefour shares up 3.4 percent
By Christian Plumb and Dominique Vidalon
PARIS, June 15 Carrefour, Europe's
biggest retailer, is pulling out of Greece in a sign companies
are struggling to do business in a country where demand has
plunged due to a debt crisis and whose future in the euro is in
The French group said on Friday it was selling its stake in
a Greek joint venture to local partner Marinopoulos, which will
become its franchisee.
The move comes as companies battle to cope with a slump in
demand in Europe's most indebted countries, which also include
Ireland, Portugal, Spain and Italy, and ahead of elections this
weekend which could decide whether Greece stays in the euro.
Italy's biggest utility Enel said on Friday it was
selling its Irish business, while French bank Credit Agricole
moved on Thursday to take direct control of its
Albanian, Bulgarian and Romanian units from its Greek bank
Emporiki in order to minimise the impact from any Greek exit
from the euro.
A spokesman for world number four retailer Metro,
however, said on Friday the German group had no plans to pull
out of Greece, where it operates nine wholesale stores.
Britain's Marks & Spencer also said last month it would
stay in Greece, though it took a 44.9 million pound ($70
million) write-off on its business there..
Carrefour, which saw first-quarter sales plunge 16 percent
in Greece, said it was taking a 220-million-euro ($277 million)
mostly non-cash charge as a result of the deal. It did not
disclose any other financial details.
NEW CEO TAKES ACTION
Carrefour, the world's second-biggest retailer behind
Wal-Mart, made 2.2 billion euros of sales in Greece last
year, but Espirito Santo analysts estimate the business lost
around 40 million euros.
CM-CIC Securities analysts put the loss at 90 million euros.
"We are comfortable that it was a rational business decision
to cut losses at this juncture, since any hope of recovery from
this business unit was invisible," said Citi analyst Alastair
The sale is one of the first decisions by Carrefour's new
boss Georges Plassat, who is due to address shareholders for the
first time on Monday amid hopes he will give some clues on his
turnaround plan for a group that has been hit hard by its
exposure to sluggish European markets.
Espirito Santo analysts said the move reflected "a pragmatic
approach to loss-making international operations and a
willingness to restructure, which is positive."
Carrefour shares were up 3.25 percent in morning trading in
Paris, leading the benchmark CAC40, though they are still down
20 percent so far this year.
Noting that Southern Europe - Spain, Italy, Greece - made 20
percent of Carrefour's sales and 18 percent of operating profit
in 2011, CM-CIC Securities analysts said: "The deterioration in
the economic situation in these three countries is obviously
putting a drag on the group's outlook."
Carrefour said the sale would allow the Greek venture, which
also operates in Cyprus, Bulgaria, Albania and other Balkan
countries, "to meet the challenges of Greece's prevailing
Carrefour Marinopoulos, formed in 1999, will continue to
operate as a franchisee of Carrefour in those countries, with
the French company providing products in exchange for a fee.
The venture has 41 hypermarkets, 287 supermarkets and 479
convenience stores in Greece and Cyprus.
Marinopoulos also has partnerships with other global brands
in Greece, including Marks & Spencer, Gap Inc, Starbucks
Corp and LVMH's Sephora unit.
Carrefour said on Thursday it had acquired Argentina's
struggling discount supermarket chain EKI to strengthen its
footprint and expand its convenience store network in the
country, without giving financial details.
"We know that EKI has been struggling so it should have been
a cheap acquisition," Espirito Santo analysts said.
Carrefour is the market leader in Argentina, a country where
it made 2011 sales of 3 billion euros, or 3 percent of total
group sales, and where it currently operates 261 stores.