Following the announcement it was to sell six hypermarkets to Leclerc earlier in 2019, Casino has announced further disposals. The sale of stores and its contract catering services company, R2C, will help it focus and invest on its core retailer operations, improve profitability and enable it to pay down debt.
Store disposals to generate €42m
Casino said it will sell 18 integrated stores and 16 sites that it owns in conjunction with master franchisees. Most of the stores, 33 of the 34 being sold, will be to Lidl, with the final one being to a Leclerc member. The 33 stores being sold to Lidl consist of 17 Leader Price, 15 Casino Supermarchés and one Hyper Casino. The store disposals are expected to be completed in the first half of 2019.
Casino said the 34 stores generated combined net sales of €148m and a total trading loss of €21m in 2018. Thus, while Casino’s top line sales growth will be affected, its profitability will benefit due to the removal of the loss-making stores from its estate.
Sale of R2C to Compass to be completed too
Separately, Casino also announced the sale of its contract catering services group, R2C. As with the store disposals the retailer said it expected the transaction to be completed in the first half of 2019. No financial details were released as part of the announcement, but Casino did note that ‘with this operation, the Casino Group is pursuing the initiatives already under way to significantly increase its profitability and strengthen its financial profile, in line with its strategic priorities.’
Growth opportunity for Lidl
The acquisition for Lidl is aligned with the discounter’s expansion plans across Europe. The Leader Price and Casino Supermarchés stores’ size will fit well with Lidl format. It will accelerate the retailer’s pace of growth, support its aim to operate more than 1,600 stores in France and enable it to enter new locations with limited investments.
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