1st LD-Writethru: Suning buys controlling stake in Carrefour China

Marco Green
June 27, 2019

However, analysts at HSBC flagged in February that China was a tough spot for Carrefour, and its chief executive Alexandre Bompard, who joined the group in 2017. It will give Suning.com increased retail competitiveness in the FMCG category.

Carrefour China, which operates 210 hypermarkets and 24 convenience stores, had net sales of 3.6 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) of 66 million euros in 2018.

Suning's purchase follows the acquisition of 37 Wanda department stores earlier this year, which will be converted to Suning.com branding. Most importantly, it will strengthen the position of Suning.com in the FMCG market and boost the company's retail business expansion in all merchandise categories.

Sources mentioned that as the activities between both the companies complement each other, it will effectively help in amassing quality resources such as global supply chain and domestic store network.

Carrefour's stores - properties which are either self-owned or on long-term lease in first and second-tier cities - will also add more value to Suning's commercial property portfolio, Tian said. It will eventually accelerate Suning.com's new business exploration and specialized operations in the category of consumer goods. The French company's network of sprawling hypermarkets in the Asian nation have struggled to keep up growth and profitability thanks to competition from online retailers. After the deal was announced, Carrefour told Reuters that talks over a minority stake sale to Suning.com's rival, Chinese tech giant Tencent, had ended.

Carrefour announced a partnership previous year with Tencent, which led to the opening of a store in Shanghai.

Carrefour to sell 80% of its China unit stake to Suning Co.

Integration among retailers has spread from online-offline alliances toward tie-up between offline chain stores.

There are plans for Suning to use Carrefour's six distribution centers for improved logistics and to introduce Carrefour's 30 million customers to Suning's services.

Other reports by Click Lancashire

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