Retail: Distressed, Casino to sell significant number of stores to Intermarché

The large retail group Casino formalized this Friday the start of a conciliation procedure for a period of four months to renegotiate its huge debt and announced its intention to sell a hundred supermarkets and hypermarkets to the Intermarché group.

“The president of the commercial court of Paris has decided to open a conciliation procedure on May 25, 2023” for the benefit of Casino and its subsidiaries, including Monoprix and Franprix, “for an initial period of four months, possibly extendable by one month “, indicates the group indebted to 6.4 billion euros at the end of 2022, including 4.5 on its business in France.

Casino specifies that this procedure, which should allow it to reach an agreement with its creditors in view of a possible restructuring of its debt, “concerns only the financial debt of the company” and of some subsidiaries. It “will have no impact on the group’s relationships with its operating partners (in particular its suppliers) and employees”.

Trading resumes this Friday

This announcement has been expected since Casino on Tuesday requested a suspension of trading in its shares “pending the publication of a press release and until further notice.” This listing resumed on the Paris Stock Exchange on Friday. Casino, which employs more than 50,000 people in France and 200,000 worldwide under many brands, has struggled to get out of debt for years, so far without success. Nonetheless, the group is the envy of billionaire Daniel Kretinsky as well as retail group Teract, whose majority shareholder is food giant InVivo.

One hundred outlets

At the end of April, the third largest supermarket chain in France, Intermarché, joined the discussions which should end by the end of May. In parallel with the opening of the conciliation procedure, Casino announced this Friday an agreement with Intermarché for the sale of more than a hundred points of sale “in the Casino France perimeter”, including hypermarkets, supermarkets and convenience stores and representing a total of 1, 15 billion euros in turnover.

This transfer, which remains subject to the agreement of the workers’ representatives and the authorities, would take place in two phases, on the one hand, a first part, with a turnover of around 600 million euros including taxes, including the “first sales to take place within the end of this year”. And a second, with a turnover of 550 million euros subject to Casino’s commitment to sell them “at the request” of Intermarché, “within three years at the latest”, “this period can be accelerated by Casino”.

For Intermarché, the operation makes it possible to “complete its national network”, explained the head of the Les Mousquetaires / Intermarché group Thierry Cotillard this Friday to the microphones of Classic radio“and that Casino refocuses on its priority areas”, Île-de-France, Rhône-Alpes and Provence-Alpes-Côte d’Azur.

“Future Round Table”

Casino specifies that, “upon signing the binding agreements, the Les Mousquetaires group would pay Casino an initial lump sum of 100 million euros, which would be deducted from the final price calculated on the market value of the assets”. Furthermore, Intermarché, which plans to convert some of these stores into Netto-branded discount stores, has “undertaken to acquire”, if Casino requests it within three years, “an additional volume of stores equal to 500 million euros in turnover”.

The operation is a cause for concern for the workers’ representatives affected by this name change because the structures of the group are different between Casino, an integrated group with a more structured social dialogue, and Intermarché, where social policy depends on each owner of shops since the brand is a group of independents.

Casino also specifies that Intermarché “will participate” in a “future round table of the Casino group, with a participation of 100 million euros”, and that this agreement is “compatible with the discussions currently underway with Teract on the industrial project launched a few months ago, as well as with all further capital operations”.