Carrefour invests to cover Spanish losses
units to help cover "expected" losses in their first year of
business.
Carrefour, the French retail group which is the largest in Europe and the second largest in the world, has been forced to bail out a number of its Spanish subsidiaries with an injection of €2.84 million.
The group's Spanish subsidiary, Centros Comerciales Carrefour, has been forced to spend the money to cover the losses at the Carrefourocio, E-Carrefour España and Viajes Carrefour units.
The company invested €558,000 in Carrefourocio, which specialises in the sale of electrical goods such as computers and stereos, €1.86 million in E-Carrefour Espana, the group's online business, and €427,000 in the travel agent Viajes Carrefour.
Sources close to CCC told the Cinco Dias newspaper that investment of this kind was normal practice by companies wanting to improve the financial performance of their subsidiaries, and added that the decision to cover the losses had been taken by the company back in June.
The same sources said that the losses had occurred because of the high cost of launching new businesses such as the online shopping portals which inevitably meant that the first year of operation of such companies would end in the red.
While the sources said that such losses do not mean that the long-term viability of the businesses is in question, the fact that Spaniards are still wary of online shopping - as Alcampo's recent decision to scrap its online business in Madrid testifies - means that there must certainly be some doubt over the ability of these business to make money, even in the long-term.
Viajes Carrefour and E-Carrefour Espana were both created in February 2001.
