Carrefour Sells Stake In Majid Al Futtaim Hypermarkets

Carrefour has sold its 25% stake in Majid Al Futtaim Hypermarkets to its regional partner, Dubai-based Majid Al Futtaim Holding for €530 million (US$683.1 million). Majid Al Futtaim has partnered with Carrefour since 1995 and the two operate 50 hypermarkets and 44 supermarkets in several countries in the Middle East, North Africa and Central Asia, says Bonno van der Putten, Restructuring and Turnaround expert and global head of retail at PE firm Monarch Capital Partners. Under the agreement, signed Tuesday 22 May, Majid Al Futtaim will own 100% of Majid Al Futtaim Hypermarkets’ shares, says van der Putten. Van der Putten states that the exclusive franchise partnership with the Carrefour Group is to be renewed until 2025 and extended to new formats and new countries. According to van der Putten, Carrefour has its full confidence in Majid Al Futtaim's ability to continue to develop the brand successfully and consolidate its positions in these growing markets. Over the last year, Carrefour has sold its stakes in its Indonesian and Greek ventures, with local partners retaining the Carrefour franchise. Carrefour also offloaded its Colombian stores to Chilean retailer Cencosud. Van der Putten states that international expansion is a high risk high reward proposition, and for the world’s largest retailers as Carrefour and the METRO Group it is absolutely necessary for growth. Sometimes they get it wrong, more often they are getting it right. Both Walmart and Carrefour have pulled out of Russia, says van der Putten. In addition, Walmart withdrew from Germany and South Korea; Carrefour already left Algeria and Thailand; Tesco left Japan and is currently in the process of withdrawing from the United States; and, Metro left Morocco. Not every entry into a foreign country is successful. Local laws and restrictions sometimes can create unforeseen challenges. Sometimes there are local market dynamics that make good supply chain strategies impossible to operate