ORIGINAL FRENCH ARTICLE: Tout un rayon !
by Jean-Emmanuel Ducoin
Translated Sunday 28 August 2011, by Henry Crapoand reviewed by
The management of Carrefour is emblematic of excessive financialisation by shareholders.
Do you know Lars Olofsson? Holding degrees in economics from the States and from Switzerland, this fifty-nine-old Swede is the CEO of one of the jewels in the crown of the retail industry, Carrefour, the second biggest retailer in the world.
Yesterday in Paris, there was a shareholders’ meeting, which was strained to say the least. Employees, trade unions and some shareholders expressed dissatisfaction. Lars Olofsson, embattled, was nevertheless given "full powers" to implement a “development” strategy which means, in a few words, sell off the discount brand, DIA, to satisfy the major shareholders ... In the worldwide strategic arena of high finance, Mr. Olofsson has a great quality: he is an exploitable and zealous servant of the real bosses. And Carrefour, the two main shareholders, who form a real tandem, are Bernard Arnault (LVMH boss) and Sébastien Bazin (manager of the fund Colony Capital). For them, nothing is really too beautiful.
In this first stage of an operation of partial sell-offs, Carrefour owners hope to make 3 to 4 billion euros. But, no mistake. Carrefour, as such, will not receive anything from that jackpot, which will only feed the joint shareholders Arnault-Bazin. In short, a nice nest egg, a symbol of the extreme financiarisation of management methods with the sole aim of profitability ...
Hence the extreme anger of union members, who met yesterday on the sidelines of the shareholders’ meeting. One of them summed up the situation: "The big problem at Carrefour is the shareholders, two financiers who are making it impossible to implement an effective recovery strategy and have just one goal - getting back their investments ... ". With the sale of DIA, which most observers consider a financial and strategic aberration, employees have legitimate concerns about the future of their society.
Whereas in 2010, the Group still earned around 400 million euros in net profits on sales of 90 billion, nearly 10,000 employees out of 76 000 were fired in three years in hypermarkets alone.
For months, social tension has reached unprecedented levels of incandescence in the company, which has increased work stoppages for wage increases ... For the following reason. The boss Lars Olofsson earned last year 2.6 million euros in salary and 900,000 euros in stock options. And you know what? A few days ago, the courts found Carrefour Hypermarket "guilty" of "paying wages below the legal minimum”. Spot the error.