The Casino retail group from Saint-Etienne has entered the 21st century with international roots and an enviable status in the world of French supermarkets. Twenty years later, heavily in debt, he is no more than a secondary actor at the mercy of outside appetites.
Officially called Casino Guichard-Perrachon, the group from Saint-Etienne is more than a century old. It was founded in 1898 by Geoffroy Guichard. The green of the apron of its sellers gave one of the most popular clubs in French football, AS Saint-Etienne, the color of its jersey.
Its name comes from its first address, a former lyrical casino closed according to the group because of “loose morals” and become a retail grocery store. Last February, the Financial Times drew a pun from it in a headline: “French tycoon rolls the dice again at Casino”. This “tycoon” is Jean-Charles Naouri, a 74-year-old financial inspector and normalien, a former ministerial cabinet, François Mitterrand era, and CEO of Casino since 2005. His role is central in the course of a group where “we feel his influence almost palpably”, says a specialist in the sector who, as often when it comes to this leader, requires anonymity to speak.
Central role of the CEO
A financier with “exceptional talent”, according to another eminent member of the ministerial cabinets of the time, known for “a work of extraordinary rigor”.
Chief of Staff to Pierre Bérégovoy, Minister of Social Affairs from 1982 to 1984, then Minister of the Economy and Finance from 1984 to 1986, Jean-Charles Naouri then turned to business. Like other French bosses at that time, he used a multitude of holding companies to take control of large groups without a large capital outlay. Also working for Rothschild & Co, he took control of Rallye, a struggling Breton distributor, and “brought” Casino to it, of which he became the first shareholder in 1992. He then expanded this entity through financial and often legal battles, acquiring beautiful names in distribution, Franprix, Leader Price, Monoprix – a nugget delighted at Galeries Lafayette, despite being run by the family of its founder -, or even the e-merchant CDiscount.
Its ambitions are not limited to France and Casino becomes a major player in Latin America, close to 50 billion euros in turnover in the mid-2010s. On the Paris Stock Exchange, Casino shares are traded then around 80 euros, against less than 7 euros today.
Diving in troubled waters
But on December 16, 2015, the American short seller Muddy Waters Capital published a report denouncing the group’s high level of indebtedness. Casino disputes, including before the courts, what it describes as “misleading information” intended to fuel “speculative attacks”, “in order to artificially lower” the stock market price.
While short sellers are indeed betting on the fall in a company’s share price to make money, debt issues nevertheless quickly become a major issue for the distributor, who has since been engaged in a “race against time”. permanent” to reimburse and renegotiate with its creditors, explains Clément Genelot, distribution specialist at Bryan, Garnier & Co.
In mid-2019, Rallye and the cascade of holding companies through which Jean-Charles Naouri controls Casino are placed in safeguard by the Paris Commercial Court. And for the lawyer Sophie Vermeille, at the time counsel for Muddy Waters, the current situation of Casino “gives reason to the short sellers” of the time.
Indecipherable future
The priority given to debt reduction weighs on the destiny of the group, because it is so much money that is not reinvested in commercial activity.
In a highly competitive business, the brand cannot lower its prices as much as some of its competitors. A problem when inflation pushes customers to be extra vigilant about the final bill. And Casino, which is selling its empire little by little, continues to lose market share in France. However, the group remains powerful in Ile-de-France, Provence-Alpes-Côte d’Azur and Rhône-Alpes, and arouses covetousness, in particular its Monoprix and Franprix brands.
There are discussions on a merger with Teract, an entity majority-owned by the agrifood giant InVivo and led by a connoisseur of distribution, Moez-Alexandre Zouari, which has joined a heavyweight in the sector, Intermarché. There is also the co-taking offer-control of the Czech billionaire Daniel Kretinsky, supported for the occasion by a strong man of French capitalism, Marc Ladreit de Lacharrière, close to Jean-Charles Naouri. These options are on the table, but nothing prevents others from emerging.
The group has 200,000 employees worldwide, including a large quarter in France. It must publish its first quarter sales on May 4 and hold its general meeting on the 10th. But few are those who risk a prognosis.
Le Temps with AFP – Published on April 28, 2023 08:07. Modified on June 10, 2023 6:24 PM.
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