Carrefour boss says e-commerce strategy starting to bear fruit
PARIS (Reuters) - Carrefour (CARR.PA) boss Alexandre Bompard on Friday told shareholders that new alliances with tech giants Google (GOOGL.O) and China’s Tencent (0700.HK) showed the French retailer’s e-commerce offensive was making an impact.
Bompard, who took over as CEO in July 2017, said accelerating its digital commerce expansion was an “absolute” priority in the face of competition from Amazon (AMZN.O) and other online rivals.
“Six months ago we were isolated. All the retail alliances were taking place without us. Now we have deals with Tencent and Google,” Bompard told the company’s annual shareholders meeting.
“Your company has become attractive again and is resolutely offensive. I am very proud of the Google partnership which shows that Carrefour is back at the highest level worldwide,” he said.
Europe’s largest retailer in January announced plans to cut costs and jobs, boost e-commerce investment and seek a partnership in China in an effort to lift profit and revenue and beat domestic rivals in the race to develop digital shopping products.
As part of these plans Carrefour announced on Monday it was teaming up with Google to boost its e-commerce on home turf.
Carrefour has been a laggard in e-commerce and the Google deal is in line with Bompard’s plans to invest 2.8 billion euros in digital commerce by 2022, six times its past rate of investment.
It comes after a deal in March between Amazon and the upmarket French chain Monoprix saw the U.S. online giant make further inroads into food retail in France.
Other digital initiatives from Carrefour have included the opening of its first high-tech store in Shanghai last month in partnership with Tencent.
The group also announced a five-year purchasing alliance with peer Systeme-U, that makes Carrefour the biggest buyer in its competitive home market.
In April, Carrefour however gave a cautious outlook for this year after sales growth slowed in the first quarter, with continued weakness in its core French market suggesting that the supermarket chain faces a long road to recovery.
Early premarket gappersGapping up:
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Gapping down:
- GNK -8.1%, AI -7.2%, ROX -7.1%, ADBE -2.6%, FNSR -2%, CLDR -1.6%, JCP -1.5%, PSTG -1.1%, IQ -0.5%
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Lagardère Sports perd les droits audiovisuels du football en Asie
Le consortium sino-suisse DDMC-Fortis remporterait un contrat estimé 4 milliards de dollars. Cet accord couvre toutes les compétitions de la Confédération asiatique de football.
Cet accord couvre toutes les compétitions de l’AFC, dont la Ligue des champions d’Asie, la Coupe d’Asie, qui a lieu tous les quatre ans, et les épreuves qualificatives pour la Coupe du monde. L’association mettra donc fin, au début de 2021, à son partenariat avec Lagardère Sports, branche du groupe français, qui avait débuté en 1993.
En annonçant ce nouveau partenariat, l’AFC a même évoqué une « nouvelle ère », une expression prisée par le président chinois, Xi Jinping, qui a fait du développement du football une priorité. « Cette conclusion réussie d’un processus qui a duré plus de quinze mois signifiera que l’AFC et la famille du football asiatique pourront contempler maintenant un avenir radieux et prospère », a déclaré, lyrique, le président de l’AFC, cheikh Salman Ben Ibrahim Al Khalifa.
Une branche malade du groupe
Du côté de Lagardère Sports, cette perte est « plus qu’un accident industriel », juge un bon connaisseur du dossier. Cette nouvelle défaite ressemble.
Asian stocks traded mixed Friday as plans for U.S. tariffs on Chinese imports revived concerns about global trade growth. The dollar extended gains, heading for its best week since 2016 after the Federal Reserve signaled further tightening in 2018 while the European Central Bank indicated it won’t raise interest rates for more than a year.
Equities edged higher in Japan, rose in Australia, were flat in Hong Kong and dipped in South Korea and China. The yen slipped after the Bank of Japan downgraded its assessment of inflation, while the euro extended Thursday’s decline. The S&P 500 Index closed with a modest rise overnight while the Nasdaq Composite hit a new record. Emerging markets are under pressure as worries about an overhaul of Argentina’s central bank leadership saw a plunge in its currency.
Nikkei +0.50% Hang Seng -0.07% CSI -0.55% Shanghai -0.64% Shenzen -1.56%
Eur$ 1.1565 CNH 6.4184 CNY 6.4169 JPY 110.83 GBP 1.3240 CHF 0.9976 RUB 62.5251 WTI 66.89
S&P -0.10% EuroStoxx +0.03% Dax +0.03% FTSE -0.21%
Macro :
- EU28 May Car Registrations Rise 0.8% Y/y to 1.399m Units
- Bank of England Warns Bank Chiefs Over 0% Credit Card Offers: FT
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>>> Up
* Carrefour Upgraded to Neutral at Credit Suisse; PT 16 Euros
* Duerr Upgraded to Buy at HSBC; PT 107 Euros
* Fraport Upgraded to Hold at HSBC; PT 78 Euros
* InterContinental Raised to Neutral at JPMorgan; PT 43.50 Pounds
* Kimco Upgraded to Overweight at JPMorgan; PT $18.50
* Nokian Renkaat Upgraded to Buy at Danske Bank; PT 42 Euros
* Roche Upgraded to Outperform at MainFirst; PT 265 Francs
* SGL Upgraded to Hold at Kepler Cheuvreux; PT 10 Euros
* Umicore Upgraded to Buy at Berenberg
* YIT Upgraded to Hold at DNB Markets; PT 5 Euros
>>> Down
* Bossard Downgraded to Sell at Research Partners; PT 170 Francs
* Campari Downgraded to Neutral at Citi
* Corem Property Cut to Hold at Kepler Cheuvreux; PT 10.30 Kronor
* IAG Downgraded to Neutral at MainFirst
* OHL Downgraded to Hold at Bankinter Securities
* PGS Downgraded to Hold at Danske Bank; PT 40 Kroner
* Sartorius Downgraded to Reduce at Commerzbank; PT 100 Euros
>>> Initiation
* Ceva Logistics Rated New Buy at HSBC; PT 29 Francs
* Maestrano Group Rated New Buy at Arden Partners; PT 30 Pence
* Westag & Getalit Rated New Sell at Montega; PT 22.50 Euros
>>> Call
IMF analysis: wages and labor costs will grow modestly in US as slack lessens in labor market
- Tax cuts and spending will increase deficit above 4.5% by 2019
- Tariffs will likely move world away from open tra
- Fiscal policy boosts are a risk to the domestic and global economy; Fed will need to hike faster in light of fiscal stimulus
ECB policymakers reportedly at odds over policy statement wording on end of QE and rate hike; some wanted to signal possible rate hike in mid 2019 and others want to keep option open for extension of bond buys - press
WeWork: a space odyssey
Start-up believes that data it gathers on ways people use space will give it an edge
Is WeWork worth $100bn? Rajeev Misra thinks so, perhaps because the SoftBank Vision Fund raised that sum easily enough itself. The fund boss’s immediate target for the workspace company is $35bn via a fund raising. Even that would make it the fourth most valuable privately held start-up.
WeWork’s sky-high value is driven by the faith of backers that it is more than just a company that leases out office space. The US-based group wants to span the global property sector. It operates in 74 cities. It aims for more than 100. It believes that data it gathers on the ways people use space will give it an edge in design, construction and outsourced services.
For now, however, revenue and costs are driven by the workaday business of office leasing. That means upfront costs are high. WeWork is known for its high-spec designs. The company says its target is for their costs to equal $2,000 per desk added. For 2017 that figure was more than $10,000.
This is why Softbank’s vocal backing matters. The Japanese group’s involvement soothed bond investor concerns about lack of profitability, enabling WeWork to raise $702m this year in spite of negative cash flow. WeWork’s burn rate means that it will need frequent financing.
Opening the taps of capital markets via a bond sale was a good idea. The bond’s price fall in the immediate aftermath suggests a reality check as investors remembered that WeWork generates negative ebitda. Revenue up 110 per cent in the first quarter to $342m will not reverse this. Revenue doubled last year. So did net losses.
WeWork’s bond price has since risen from 93 cents in the dollar to 97 cents. The company’s chance of turning a profit by the time the bond matures in 2025 depends on a rapid slowdown in costs. That looks unlikely while growth is high. But thanks to SoftBank this does not mean principal will go unpaid. While generous capital raising continues, the bond is a good bet.