Published on : Dec 13, 2013
French multinational retailer Carrefour has inked a $2.75 deal with Paris-based mall operator Klepierre wherein the former, along with right other investors, will purchase 127 malls in France, Spain and Italy.
The retail giant is already in ownership of 45 malls in France, whereas the new shopping centers will come under the aegis of a new company being formed to execute this deal.
Carrefour, once a force to reckon with, has been struggling with its business over the past few years, much before the debt crisis in Europe destroyed some of its largest markets. Since then, the company has introduced frequent and numerous changes in its strategy—the latest one being one of them. In 2012, Carrefour saw Georges Plassat taking over as chief executive with a focus on reinstating the company at the top of the all-in-one hypermarket league by cutting costs and realigning market strategy.
Carrefour’s latest deal is expected to be finalized by the first quarter of 2014, subject to regulatory approval. On the global scenario, Carrefour comes second only to US-based Wal-Mart. Some of the reasons for Carrefour’s struggling business include a growing consumer inclination towards online shopping and a preference for specialist enterprises for non-food goods.
The group now hopes that the rental income gained from the new malls it hopes to acquire will boost the Carrefour’s revamp strategy. An annual rental income of 180 million euros is expected to flow in from this deal.
Of the total deal, the company will invest around 100 million euros in cash and contribute 45 Carrefour malls in France that are together valued at 700 million euros. With this, it can claim a 42 percent stake in the new company being formed.