In a bid to strengthen its financial position, Carrefour has announced plans to concentrate on its most profitable markets in terms of both revenue and cash flow. As part of this strategy, the company will sell 100% of its operations in Italy, where it has consistently struggled to gain ground.
Carrefour currently runs a network of 1,188 outlets across the country, including convenience stores, supermarkets, hypermarkets, and cash & carry sites. Despite its sizeable presence, the retailer has never been able to achieve sustainable profitability in Italy’s highly fragmented retail market.
The group has now entered exclusive negotiations with NewPrinces Group for the sale. NewPrinces, one of Italy’s largest food manufacturers listed in Milan with annual revenues of €2.8 billion, has agreed to invest at least €200 million to revitalise the business. Carrefour itself will provide financial support of around €240 million.
It’s unusual for a food manufacturer to acquire a retailer, and the move has surprised industry observers. Its chairman said that the company is taking a decisive step towards vertical integration between production and distribution, strengthening its ability to create value along the entire supply chain.
During a transitional phase, stores will continue trading under the Carrefour banner through a brand and services licensing agreement, ensuring commercial continuity while preparations are made for the shift in operational management.
The transaction is expected to be completed by the end of this year.