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French retail giant AuchanSuper about to enter Vietnam

Thursday, January 14, 2016, 14:20 GMT+7

AuchanSuper, a major retail brand of France, is planning to enter Vietnam with the opening of the first store in 2016, according to a recent report on Ho Chi Minh City’s retailing landscape for this year of the Vietnamese arm of U.S.-based realty consultant firm CBRE.

CBRE Vietnam said in the report last week that Ho Chi Minh City will be home to 15 AuchanSuper convenience stores, reinforcing the presence of foreign retailing brands in the southern economic hub.

As of 2015, only one foreign retailer, which is French-owned Big C, had been on the list of the top five players in Vietnam alongside such local competitors as Saigon Co.op, Mobile World, Nguyen Kim Trading Joint Stock Company, and Saigon Jewelry Company Limited.

Following the trend of other Asia-Pacific countries, operators of convenience stores will possibly gain a much larger market share, according to the report.

Established since 1960, Auchan, the largest retail brand of France, currently owns nearly 900 hypermarkets, 370 supermarkets and more than 860 shopping centers worldwide.

In Vietnam, Auchan has been present since 2014 through the Simply Mart supermarket chain, which is expected to grow to about 20 stores in Vietnam until 2020.

Big C, on the other hand, may be sold to other investors after Casino Group, the owner of the retail chain, issued a memorandum last month stating that it may seek a new owner for its supermarket chain in Vietnam, as the company plans to strengthen its financial flexibility by selling assets in the country, as well as Thailand and Colombia.

Despite a sustainable growth rate, earnings from the Vietnamese arm are miniscule in comparison with other foreign businesses of Big C.

In 2016 Casino Group is expected to enact what it calls a ‘deleveraging plan’ of more than two billion euros (US$2.2 billion), mainly through real estate transactions and the disposal of non-core assets, according to the memo.

The French group currently owns 10 retail brands across the globe, with a concentration in Asia. The Big C brand is used for the supermarket chain in Vietnam and Thailand.

Regarding the wholesale business in Vietnam, the sole foreign player, German-owned Metro Group, last week announced it had officially been transferred to Thailand's TCC Holding Co.

TCC acquired all of Metro Cash & Carry Vietnam’s operations, including 19 wholesale stores and related real estate portfolios for an enterprise value of 655 million euros ($712.14 million), according to a Metro press release.

Metro said the deal resulted in a cash inflow of around 400 million euros ($434.9 million), adding that payment had already been made.

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