Ceconomy latest victim of retail crisis

Bloomberg

Ceconomy AG, Europe’s biggest consumer-electronics retailer, eliminated its dividend and warned that earnings will decline another year in the retail industry’s latest disaster.
The stock fell as much as 16 percent to a record low as the departure of Chief Financial Officer Mark Frese leaves the company facing a leadership void. The 54-year-old executive, who has been helping to fill the company’s empty chief executive officer position, will leave at the end of this month, Ceconomy said.
Whoever becomes the full-time CEO of Ceconomy will take charge of a company that expects operating profit to decline again after a 19 percent slump in its past fiscal year. Ceconomy has been wrestling with competition from Amazon.com Inc and other online sellers, and the company was hit hard because it failed to secure hoped-for volume discounts from suppliers, according to analysts.
Former CEO Pieter Haas resigned in October, and the company’s shares have lost almost three-quarters of their value this year as the company cut its outlook three times.
A strategy to consolidate the industry is on the back burner after Ceconomy focussed too little on its own operations.
The CFO position will be temporarily filled by Ceconomy board member Bernhard Duettmann, 59, who was interim CFO at Stada and has experience at German companies Lanxess, Beiersdorf and Tesa.
Pain afflicts retailers across Europe. XXL ASA, a Norwegian sporting-goods retailer, dropped as much as 44 percent after reporting disappointing Black Friday sales and saying it had been too aggressive in discounting. The company’s CEO resigned just 11 months into the job. Sports Direct International CEO Mike Ashley said business in November was “unbelievably bad.”
Asos CEO Nick Beighton said that Germany and France have been especially weak in a profit warning that drove the online UK retailer’s shares down 38 percent. A trade group has said the Yellow Vest protests in France have cost retailers about $2.3 billion in lost sales.
Ceconomy’s profit outlook excludes contributions from the company’s stake in French retailer Fnac Darty SA. That investment should add a double-digit million-euro amount to earnings, Ceconomy forecast. The search for a new CEO is on track, the company said.
“We have a leadership challenge and a skill problem,” Ferran Reverter, recently appointed CEO of the Media Markt and Saturn chains, said.