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Amazing just how quickly plans can change. Just a few months after announcing a grand restructuring plan including two spinoffs, French retailer Carrefour (CRERY) has shelved plans to spin off 25% of its property unit. Carrefour’s stock price has suffered since the spin announcements and the moves were generally derided by analysts and investors as not creating much value (see our earlier post here). The motivation for the move had also been called into question as it likely would have benefited a few large shareholders. One reason for the delay is the firing of James McCann, the company’s top executive in France who was recruited to the company just last year. The company continues to struggle in its home town and CEO Lars Oloffson will now oversee the transformation efforts there.
Ironically, the postponement hasn’t done much to stem the tide and if anything, confidence in the current management’s decision making is even weaker. I am sure management is feeling the pressure to perform which could lead to even more short-term focused decisions. The company still intends on moving forward with its other spinoff of discount group Dia which will be listed on the Madrid exchange. More details are expected next week and we will keep you updated.
Disclosure: Author has no position in any stock mentioned.
Carrefour had an investor day where they discussed Dia’s spinoff and more. Here is WSJ article on it: http://online.wsj.com/article/BT-CO-20110517-705005.html