Carrefour confirms Plassat as new chief

Georges Plassat, the incoming head of Carrefour, on Monday underscored the challenge of reinvigorating the world’s second-largest retailer by sales, saying he was “well aware of the magnitude of the task ahead.”

Carrefour confirmed on Monday that the veteran retailer would replace Lars Olofsson as chief executive this spring. Mr Plassat is to quit fashion group Vivarte, which is majority-owned by UK private equity group Charterhouse, to join Carrefour on April 2 as chief operating officer, becoming chairman and chief executive after the June 18 shareholders’ meeting when Mr Olofsson will step down.

In his first public comments, Mr Plassat called for “the support of all within the company” – which some observers interpreted as an early warning to the French retailer’s activist shareholders to refrain from interfering and to let him get on with the job.

Colony Capital of the US and Groupe Arnault, the investment arm of French luxury tycoon Bernard Arnault, hold 16 per cent of the shares and 20 per cent of the voting rights in Carrefour. Mr Plassat will be Carrefour’s third chief executive since the two shareholders, acting in concert, made their initial investment – now heavily lossmaking, at least on paper – five years ago.

“Mr Plassat clearly has the necessary experience from a retail perspective,” said Jonathan Alvis, analyst at Bernstein Research. “It remains to be seen whether, if necessary, he will be willing to oppose major shareholders in order to do what’s best for Carrefour.”

Mr Plassat has spent the past 12 years at Vivarte, first as chairman, then as chief executive, and is credited with having made the group profitable within two years. Vivarte has continued growing through the recession, posting a 4.6 per cent increase in sales to €3.6bn in 2010/11.

Carrefour this month reported stagnant sales in 2011 and has said that operating profit will be down 20 per cent compared with the previous year.

Mr Plassat is a self-made multimillionaire thanks in part to his 8 per cent stake in Vivarte, whose more than 20 brands include the André and Minelli footwear stores and the Kookai and Naf-Naf women's wear chains.

He already knows Carrefour, having headed the retailer’s Spain business for two years after a long career at Casino, Carrefour’s smaller, domestic rival, and before joining Vivarte.

Jaime Vazquez, analyst at Santander, said: “We believe he is the possibly the best candidate for the job. He is French, he knows well the French and Spanish retail markets and he knows Carrefour. His experience in mass-market non-food will be valuable.”

Mr Plassat is regarded as an able manager, according to several people who know him.

“He is charming with a wicked sense of humour,” said one person who knows him. He has “a minimal capacity to accept underperformance,” said another.

Luc Vandevelde, former chairman of Carrefour, said: “Opinions on Georges vary wildly, but his one great advantage is that he really knows retailing and Carrefour needs a retailer at the top.”

Some analysts cautioned against expecting to much from Mr Plassat, given Carrefour’s exposure to slow-growing European economies and its outdated hypermarkets format.

Justin Scarborough, analyst at RBS, said: “We do not see a quick fix to Carrefour’s problems and while its exposure to western Europe remains so high, this will continue to drag on profitability.”