Carrefour struggles to win back investors
PARIS: Carrefour SA pioneered hypermarkets in France and sold the brand around the world in an ambitious expansion that started more than five decades ago, reaching a market value that was once higher than that of luxury-goods empire LVMH.
Since then, Carrefour's fortunes have waned as the chain struggles to compete in its cut-throat home market and retreats from overseas.
Its business is worth a fraction of LVMH's, the current global flag bearer for French business, and chairman and chief executive officer (CEO) Alexandre Bompard is struggling to convince investors that he can propel it through a transformation.
Carrefour shares hit a 32-year low in June after JPMorgan Chase & Co placed the stock on negative catalyst watch and downgraded its estimates.
Bompard responded by offloading flagging operations in Italy, and a better- than-expected sales print contributed to an uptick in shares. But that was quickly replaced by concerns over the grocer's future after years of stagnating profits.
Investors are still asking the same question of Bompard from when he took the helm eight years ago – can he spur growth at Carrefour, when many previous CEOs have failed?
Plenty of observers bet he can't.
Carrefour is among the most-shorted grocery chains in Europe, with shares out on loan at 6% of the free float as of July 24, according to data from S&P Global Market Intelligence.
The stock is still down about 10% this year, and in the last two decades, it's the only major European grocer to provide a negative return. — Bloomberg
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