Carrefour Franchising Litigation Seems to be Medium-Term Problem -- Market Talk

Dow Jones06-19

0736 GMT - Carrefour's "franchising crisis" seems to be less serious than initially though and more of a middle-term concern, Bryan Garnier analyst Clement Genelot says in a note. The French finance ministry requested a EUR200 million fine for alleged abusive practices toward the group's franchisees. Carrefour said it was vigorously contesting the case and considered the penalty disproportionate. Following an emergency conference call, the French grocer seems to be confident in its ability to win all the cases, the analyst says. The French court could take 12 to 18 months to make a decision, and if the EUR200 fine were applied, it would imply no cash outflow for several years, the analyst adds. "We understand that Carrefour does not intend to make any changes to its franchising contracts and in its lease-management/franchise expansion strategy" Garnier says. Shares are up 0.8% at EUR14.04. (michael.susin@wsj.com)

(END) Dow Jones Newswires

June 19, 2024 03:37 ET (07:37 GMT)

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Following an emergency conference call, the French grocer seems to be confident in its ability to win all the cases, the analyst says. The French court could take 12 to 18 months to make a decision, and if the EUR200 fine were applied, it would imply no cash outflow for several years, the analyst adds. \"We understand that Carrefour does not intend to make any changes to its franchising contracts and in its lease-management/franchise expansion strategy\" Garnier says. Shares are up 0.8% at EUR14.04. 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