They took him out. In a few minutes Pieter Haas, the general manager of Ceconomy, the European hi-tech trade giant (Mediaworld, Saturn, Fnac-Darty, born in 2017) was defenestrated by the board of directors because the results of his management were not judged, with an understatement, in line with the programs. And they told him with a dry, concise press release. In one year, the stock on the Frankfurt Stock Exchange has in fact lost 56 percent of its value. “The results we expected - the text continues roughly - have not arrived even if the Haas strategy will be continued. There is no doubt, however, that it is necessary to proceed – the press release continues with a hypocritical turn of phrase – in terms of personnel repositioning”. To put it plainly, with layoffs.
Wrong strategies or e-commerce disaster?
What has gone wrong since that July 2017 when the Ceconomy holding (13,5 percent of the European market) was born from the split into two business branches of the giant Metro which still has the food wholesale sector? Ceconomy had to focus exclusively on consumer electronics and household appliances to avoid unprofitable mixes with food. He did so by then going on to buy 24 percent of the Fnac-Darty group in France (7 billion euros in turnover). Then it acquired 15 percent of the Russian group M.video while a quarrelsome new shareholder, Sfam, a French provider of insurance services, entered the capital of Fnac-Darty with 11 percent. At the beginning Ceconomy had a turnover of 22,2 billion euros, an Ebitda of 704 million, out of 1035 points of sale and 65 employees. Today the turnover of the 2017-2018 management is practically static with a 0,2 percent while the Ebitda has fallen to 630 million euros. Furthermore, it generates only 2,4 million euros with e-commerce, an inadequate 10 percent compared to 17 percent for Fnac-Darty. Which, moreover, seem more sgallettanti than the German signs of Ceconomy.
One year only for Haas
Yet Haas had tried to increase the more profitable area of services with installation and repair activities but the excessive power of Amazon which advances like a steamroller even in wholesale (penalizing Metro heavily) and with dumping actions is bringing distribution to its knees European. Even the English Tesco finds itself in the middle of the ford, as we have already reported, to the point of asking the government for interventions which are already foreseen to restore conditions of fair competition in hi-tech sales. What will happen to Ceconomy and the companies owned by the German holding company? Assuming that in just one year neither Nembo Kid nor Spider-Man would have done better than Haas, and that he is busy increasing profits and dividends by cutting staff, it is also necessary to consider that the exceptional summer season (in Europe the prolonged heat stalled sales) impacted the lack of sales growth compounded by the madness of promotions. But there has also been an enduring lack of strategic vision, which began well before Haas, as retail changes in the face of new technologies and changing markets. Without omnichannel and multichannel, large traditional retail groups risk downsizing. And, as it is clear to everyone by now, in Europe as in other industrialized areas, there are absolutely too many shopping centers and outlets.
