Carrefour Investor Knight Vinke Wants Independent Chairman
In an open letter to Carrefour’s shareholders, employees and board obtained by Bloomberg News, the activist investor also suggested that the world’s second-largest retailer consider “a twin-headed solution,” with one CEO for France and neighboring countries and another for emerging markets.
“The situation is far from ideal and we call on the board to appoint an independent chairman as soon as possible,” Knight Vinke, which owns about 1.5 percent of Carrefour’s shares, said in the letter. Weak sales and share price performances are due in part to “serious governance issues,” the investor wrote.
Florence Baranes-Cohen, a spokeswoman for Carrefour, declined to comment.
Carrefour cut its 2011 profit forecast last week for the second time in three months, saying it now expects a decline of as much as 20 percent amid a slump in Europe. The retailer, whose shares have fallen 37 percent this year, is adjusting prices and remodeling its largest stores to revive earnings as competition intensifies in France, its largest market.
“We cannot stand by and watch without reacting,” Knight Vinke wrote. “As to the role of the CEO, the company’s management has within its ranks a number of highly experienced professionals with a real understanding of retailing, both in France and abroad. We would not recommend that the board bring in an outsider, once again, to fill this position.”
Knight Vinke stopped short of calling for Olofsson to be ousted. Olofsson joined Carrefour as CEO in 2009 from Nestle SA and added the role of chairman in June, succeeding Amaury de Seze, who had recommended unifying the functions. De Seze, who spent three years as chairman, remains on the board as lead director.
Knight Vinke holds about 10 million Carrefour shares and said it considers the stake a long-term holding.
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