Europe Crawls As OPEC Holds

LONDON--European markets were not looking good for the second day in a row on Thursday. News that the German government had been unable to broker a deal for Opel hit the equity markets as investors worried about a potential bankruptcy of General Motors that could affect the American carmaker's operations in Europe. (See "Open Verdict On Opel.")The Dow Jones Euro Stoxx 50 index was down 1.0%, at 2,117.12 points at midday on Thursday. Miners lost ground, with BHP Billiton, Rio Tinto and Xstrata down between 0.8% and 1.8%.Shares of Man Group ( MNGPY - news - people ) slumped 9.2%, or 23 pence (37 cents), to 227 pence ($3.62), in London after the hedge-fund manager said it had lost $2.8 billion in assets over two months, despite a broad market rally.Shares of Dutch retail chain Ahold ( AHONY - news - people ) fell 2.3%, or 20 euro cents (28 cents), to 8.72 euros ($12.11) in Amsterdam as the company warned that the retail environment was still challenging. The fall came despite having posted first-quarter operating profits that were in line with expectations thanks to market share gains in the U.S. an...
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Ahold Gets A Kick Out Of U.S. Sales

LONDON -- Dutch food retail chain Ahold is getting a boost from shoppers looking for bargains and choosing to eat in. The company on Thursday posted first-quarter operating profits that were in line with expectations thanks to market share gains in the U.S. and the Netherlands, as a result of rapidly growing sales of its own products.But shares of Ahold ( AHONY - news - people ) fell 2.3%, or 20 euro cents (28 cents), to 8.72 euros ($12.11)during morning trading in Amsterdam as the company warned that the retail environment was still challenging. First-quarter earnings before interest and taxes (EBIT) rose 18% to 396 million euros ($552 million), compared with the 395 million euros ($548 million) projected by analysts and, and follows its recent in-line quarterly sales report."The supermarket chains in the U.S. are doing quite well for Ahold, this is mainly due to its own-store brands which are selling increasingly fast in the U.S.," said Nico Van Geest, an analyst with Keijser Capital in Amsterdam. Some of Ahold's stores and store-brands in the U.S. include Stop & Shop in Massachusetts and Giant Food in Maryland, Virgina, Delaware, and the District of Columbia. "Shoppers can pay less for cheaper, yet good-quality products. This is an strategy the company has been implementing for a year and it can now be harvested."Since last year, Ahold has been focusing on cutting retail prices. Ahold's divisions in the U.S. also got a boost from the re-branding of Stop & Shop and Giant Landover. Measures taken by the company included the promotion and expansion of own-label p...
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Carrefour CEO Wins Over Investors

If investor approval was all Lars Olofsson, the Carrefour chief executive, was looking for, he certainly got it on Thursday. Shares of the French retail chain soared nearly 6.0% in Paris, after the new CEO outlined plans to spend 600.0 million euros ($767.3 million) on increasing Carrefour's price-competitiveness after a slowdown in France and Europe hurt annual profits.But some industry-watchers were less enthused by the turnaround plan, which was heavy on confidence and cost-savings but light on asset disposals and property spin-offs. A lack of clarity on the latter was part of the reason why Olofsson--previously an executive at (other-otc: NSRGY - news - people )--took the reins on Jan. 1, after a boardroom struggle involving activist investors like billionaire Bernard Arnault cost the career ofJose Luis Duran, the former CEO. (See “Carrefour Lifted By Head Honcho Switch.”)“I am surprised the stock has gone up so much,” said Christopher Hogbin, an analyst with Sanford C. Bernstein. “There was no mention of a property strategy and no mention of asset disposals. I'm relatively surprised that they didn't mention a longer-term vision, given that Olofsson must have the tacit approval of the activist shareholders."Shares of (other-otc: ...
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Carrefour At The Crossroads

French retail chain Carrefour is ready for a change. New chief executive Lars Olofsson is in charge, and on Thursday he promised to spend 600 million euros ($767.3 million) making Carrefour more price-competitive after the economic slowdown took the wind out of the firm’s French and wider European operations in 2008.“My priority is France, first and foremost,” said Olofsson, at a presentation to announce Carrefour’s 2008 results on Thursday. The company’s famous hypermarkets dot the French landscape, selling everything from cans of soup to television sets, but they witnessed a downturn in demand as consumers have cut back on non-food spending. Annual company sales grew 0.9% in France, the weakest out of all Carrefour’s regions. A small rise in annual operating profit, which just about satisfied analyst expectations, helped shares of (other-otc: CRERF - news - people ) gain 2.2%, or 53 euro cents (68 cents), to 25.20 euros ($32.23), during morning trading in Paris. Rival (other-otc: CGUIF - news - people ) fell back 0.8%, while British supermarket chain (other-otc: TSCDY - ...
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Ahold Beats Retail Blues

Food retail chain Royal Ahold picked a good time to start restructuring itself back in 2006, two years before the financial meltdown began to infect the disposable income of ordinary shoppers. On Monday, it marked the closure of this two-year turnaround with a set of expectation-beating quarterly results, which vindicated its gradual price-cutting strategy rather than all-out aggressive discounting."All divisions were better than expected," said Ton Van Ooijen, an analyst with Kepler, after Ahold said its quarterly profits had risen 8.8%, to 285.0 million euros ($358.6 million). Van Ooijen told Forbes that Ahold had avoided heavy spending on promotional activities or aggressive discounting, which preserved its gross margin and profitability, and also reduced waste by keeping tight control over orders and inventory.Shares of (other-otc: AHONY - news - people ) gained 2.1%, or 19 euro cents (24 cents), to 9.05 euros ($11.39), during afternoon trading in Amsterdam. But despite its strong quarterly performance, Ahold--which owns the American grocery chains Stop & Shop and Giant Landover--did not give any guidance for 2009, deciding instead to reiterate its "longer-term goals" of 5.0% annual sales growth and 5.0% retail operating margin."In the current environment, we didn't think it would be sensible to restrict ourselves to one short-term figure," said a spokeswoman for Ahold. When asked whether the company's longer-term goals were a disappointment, given that already for the year 2008 Ahold had reported an operating margin of 5.0% and recurring sales growth of 5.9%, the spokeswoman said: "It's all very well achi...
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Ahold Beats Retail Blues

Food retail chain Royal Ahold picked a good time to start restructuring itself back in 2006, two years before the financial meltdown began to infect the disposable income of ordinary shoppers. On Monday, it marked the closure of this two-year turnaround with a set of expectation-beating quarterly results, which vindicated its gradual price-cutting strategy rather than all-out aggressive discounting."All divisions were better than expected," said Ton Van Ooijen, an analyst with Kepler, after Ahold said its quarterly profits had risen 8.8%, to 285.0 million euros ($358.6 million). Van Ooijen told Forbes that Ahold had avoided heavy spending on promotional activities or aggressive discounting, which preserved its gross margin and profitability, and also reduced waste by keeping tight control over orders and inventory.Shares of (other-otc: AHONY - news - people ) gained 2.1%, or 19 euro cents (24 cents), to 9.05 euros ($11.39), during afternoon trading in Amsterdam. But despite its strong quarterly performance, Ahold--which owns the American grocery chains Stop & Shop and Giant Landover--did not give any guidance for 2009, deciding instead to reiterate its "longer-term goals" of 5.0% annual sales growth and 5.0% retail operating margin."In the current environment, we didn't think it would be sensible to restrict ourselves to one short-term figure," said a spokeswoman for Ahold. When asked whether the company's longer-term goals were a disappointment, given that already for the year 2008 Ahold had reported an operating margin of 5.0% and recurring sales growth of 5.9%, the spokeswoman said: "It's all very well achi...
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