Auchan Vietnam has confirmed that its parent company, Auchan Retail, is leaving the Southeast Asian country, days after Reuters reported that the French supermarket group plans to sell its loss-making Vietnamese business.
Auchan Retail CEO Edgar Bonte had decided to sell its 18 stores in Vietnam, Reuters reported on Wednesday, citing French financial newspaper Les Echos.
An Auchan Vietnam representative confirmed the exit plan to Tuoi Tre (Youth) newspaper on Thursday, adding that the reason for the withdrawal is a lack of profit.
The offer to sell 18 Auchan outlets in Vietnam has drawn interest from potential buyers, with a particular unnamed Vietnamese retailer anticipated as the leading candidate, according to the representative.
Auchan made its appearance in Vietnam in 2014 and has followed a business model of in-building retail – a model that involves cooperating with real estate firms to build stores inside their properties.
In the five years since launching Vietnam, it has developed 18 outlets which have generated €45 million (US$50.4 million) in revenue, according to Reuters.
At an e-commerce event in October last year, an Auchan Vietnam representative told Tuoi Tre that the retailer wanted to drive its business in the e-commerce direction, beginning with opening an authorized virtual store on the online marketplace Lazada.
Auchan’s announcement of its exit from Vietnam thus caught the public off guard.
Another unhealthy Auchan business, the Auchan Retail Italia arm, was sold to the Italian co-operative retail group Conad earlier this week, following the former’s review in March of such loss-making markets.