Carrefour mothballs Planet revamp plan Carrefour is to halt the rollout of its flagship Planet new-style hypermarkets and will slash its dividend after reporting a 14 per cent fall in net profits in 2011. Lars Olofsson, the outgoing chief executive, said the world's second-largest retailer by sales had faced a "tough" year, especially in austerity-hit southern Europe and in France, where its hypermarkets continued to underperform. He disclosed that Greece, one of the group's biggest markets and where Carrefour is the largest retailer by sales, had slid into loss, with hypermarket non-food sales falling by 25 per cent last year compared with 2010. But he ruled out exiting the country, saying the business could be turned round once the economic situation stabilised. "I'm confident we will come out stronger," he said. Carrefour reported net profit of €371m, down 14 per cent on 2010 on sales up 1 per cent at €81.3bn. Current operating profit of €2.2bn was 19 per cent down on 2010, just within the group's revised October guidance that it would be up to 20 per cent lower. Current operating profit fell by 32 per cent in France; by 28 per cent in Europe and by 8 per cent in Asia. It rose by 28 per cent in Latin America, driven by Brazil. Analysts at Credit Suisse said 2011 had been "another disappointing year for Carrefour." The net result from continuing operations was a loss of €2.2bn, against a profit of €340m in 2010 after a host of exceptional gains and charges. These included an exceptional €1.8bn goodwill impairment on operations in Italy and exceptional gains of €1.9bn from last year's spin-off of Dia, the hard-discount business and a capital gain of €667m on the disposal and exit from Thailand. Mr Olofsson, who was appointed three years ago after Carrefour's activist shareholders - Colony Capital of the US and Groupe Arnault, luxury tycoon Bernard Arnault's private investment vehicle - drove out his predecessor, said the group's revamped Planet stores had performed below expectations but much better than non-converted hypermarkets. The former Nestlé senior executive had made Planet the centrepiece of his efforts to turn the company around with an effort to revive its outdated hypermarkets format with beauty areas, crèches and sushi stands. But Mr Olofsson said the underperformance was due to "the economic context in southern Europe" but acknowledged management shortcomings by saying that stock shortages and other execution shortcomings had been due to "an overload of critical reorganisation projects." Carrefour has spent €400m on 81 Planet stores in Europe. It had originally aimed to convert 245 hypermarkets across Europe at a €1.5bn cost when it launched the plan in September 2009. Matthew Truman, analyst at JPMorgan, said the decision to mothball Planet "leads to much reduced capex forecasts for 2012 of €1.6bn vs €2.3bn and indicates a company in retreat whilst it waits for a new strategy from another new chief executive." Georges Plassat, head of privately owned retailer Vivarte and a former Carrefour senior executive, is to join Carrefour on April 2 as chief operating officer, becoming chairman and chief executive after the June 18 shareholders" meeting when Mr Olofsson will step down. The dividend was cut by 52 per cent to €0.52 a share.