Eighteen months after acquiring 294 Casino stores, Les Mousquetaires (Intermarché, Netto) are set to close 10% of them. While the group anticipated some operational damage, the announcement of slashing 680 jobs still comes as a harsh reality. Jean-Charles Naouri, the former CEO of Casino, had previously pushed these stores into a difficult position.
It was clear to everyone that when Intermarché bought nearly 300 poorly maintained stores from the Casino group in 2023, there would be challenges. However, Les Mousquetaires learned from their failed attempt to acquire some Leader Price stores in 2020: by only seeking to acquire a few stores, they had failed to convince CEO Jean-Charles Naouri. Therefore, three years later, in collaboration with Auchan, the group led by Thierry Cotillard committed to acquiring almost all of Casino’s hypermarkets and supermarkets, even if it meant facing some closures.
Thierry Cotillard, the head of Les Mousquetaires, admitted in January 2024 on the show Quotidien (TMC) that, “I would like to say that 100% of the jobs will be saved but unfortunately, there may be a few cities where no resumption is possible.” Ultimately, it turned out to be more than just “a few” stores affected: currently, thirty stores are contemplating closure, threatening 680 jobs.
Significantly Higher Rents
The primary issue for the majority of these outlets is their rent level. Years ago, Casino had to sell the walls of its stores to reduce debt. The problem was that these sales were made hastily and under pressure from landlords, Casino, under Jean-Charles Naouri, agreed to rents that were two to three times higher than market rates, in exchange for a good sale price.
Upon taking over the business operations of Casino’s supermarkets and hypermarkets, Intermarché was able to renegotiate the rents for many of them, bringing them back to industry standards. However, for others, the renegotiation failed. As a result, some stores reported losses of nearly 10 million euros, with high operational costs on one side and a 20% price reduction in-store by Intermarché on the other, which did not help increase sales.
Additionally, some stores were in extremely poor condition, or others where the revitalization of sales just didn’t catch on. “Part of the Casino portfolio was a bottomless pit,” confirms Clément Genelot, a financial analyst at Bryan, Garnier & Co. “Intermarché’s leaders knew they were buying a basket and that in the basket there would be some rotten fruits.”
Over 5,000 Jobs Cut in Big Retail in Two Years
So, did Les Mousquetaires really strike a good deal by spending over two billion euros in total? “In the end, they always find their way,” estimates Clément Genelot. “Thierry Cotillard’s priority is to gain market share, in a context where the law banning net artificialization of land reduces the possibilities of new stores. They therefore seized the main acquisition opportunity that existed.”
Auchan, who also took over some stores from Casino, should be less exposed to these closures: by splitting the stores of the Casino group, the two buyers agreed that Intermarché would take over the riskiest stores, with the red bird brand already preparing to launch its own employment preservation plan (EPE) at that time.
The abrupt end of these thirty stores remains a strong symbol and a major shock in an industry not accustomed to such massive closures. Even Casino’s debacle had led to “only” 19 store closures. Unlike Auchan or Casino during their PSEs, Intermarché will not need to negotiate with powerful trade unions, as each store operates as an independent business. However, Les Mousquetaires’ management has already announced that it will offer severance conditions at least as favorable as those offered by Casino a few months earlier.
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Hi, I’m Danielle from the Decatur Metro team. I share my economic insights to boost your professional projects.
