Beijing: Carrefour SA is weighing options including a sale of its Chinese business, mirroring other international consumer firms that have decided to exit the country in recent years, people familiar with the matter said.
The French retail giant is working with an adviser and has begun reaching out to potential suitors, the people said, asking not to be identified because the deliberations are private. Carrefour could seek about $1 billion for the Chinese business, though it may also opt to divest just a stake or decide against a sale, the people said. No final decisions have been made, they said.
A spokeswoman for Carrefour said a sale of the China unit is “not on the agenda.”
Carrefour joins other multinational consumer groups in rejigging its China business amid slowing growth. Consumers doing more of their shopping online has taken the shine off retail expansion in the world’s second-largest economy. With the potential sale, Carrefour joins German retailer Metro AG, which is offloading a majority stake in its Chinese business, people familiar with the matter said last week.
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Carrefour opened its first supermarket in Beijing in 1995, making it one of the first foreign retail firms to enter the Chinese market, according to its website. It operates stores in more than 70 cities in the country.
Net sales at Carrefour’s Chinese unit declined about 10 per cent last year to 3.6 billion euros (Dh14.80 billion), according to the company’s annual report.
In early 2018, social media giant Tencent Holdings Ltd. and local retailer Yonghui Superstores Co. agreed to take a stake in Carrefour China. The companies planned to use the partnership to work together on data, mobile payments and so-called smart retail and to reverse declines as more customers in the country gravitated toward online shopping.
Still, “alliances in China have slowed, rather than stopped the revenue decline,” Bloomberg Intelligence analyst Charles Allen said in an April report.
— Bloomberg
