The existing relationship between French-based Casino Guichard Perrachon (or the Casino Group) and the United States-based Amazon has been strengthened further by the two companies.
More of pick up lockers have been installed inside the stores of the Casino Group by Amazon while allowing more stocking of the products from the French company on the e-commerce platform of the company largest online retailers of the world.
It was not long ago that an agreement for co-operations and joint operations were struck between Amazon and higher end supermarket chain Monoprix in Paris belonging to the Casino Group and the latest development of furthering the partnership comes close on the heels of that agreement. The previous agreement, coupled with the current developments, has raised hopes among Amazon investors that an acquisition of the French firm can be on the cards in the near future.
“This announcement represents a new step in strengthening Casino’s omnichannel strategy to always be a little more in the heart of consumers’ lives,” Casino Group CEO Jean-Charles Naouri said in a statement to the media.
There was no comment available from Amazon as it said that it did not comment on market speculation over acquisition.
There is a hope among investors that since the acquisition of the US-based food retailer Whole Foods last year by Amazon, the e-commerce platform could not look to expand its physical retail footprint in Europe through the acquisition route. And its close partnership with the French retailer could be the first move top that aim.
Experts also pointed out the fact that currently the French food retailer is faced with pressure from its investors over the state of its finances and hence busy in divesting its assets in an efforts to reduce its debts. This situation of the French firm can be a source of market speculation especially when Amazon is looking to deepen its cooperation with the retailer.
There was a slight drop in the stocks of Casino after news of the expansion of its partnership with Amazon. On Tuesday, the share price of Casino Group fell by just 0.5 per cent despite the news of the partnership expansion and the decision to slash its credit rating from BB Negative to BB Negative Outlook by ratings agency Standard & Poor. That slash in the rating has now put the stocks of the French company closer to the junk status.
Announcement of its decision to sell 12 of its hypermarkets and 20 supermarkets to Apollo Global Management for a deal worth €470 million was made by Casino Group earlier this week. That is being seen by analysts as a part of the efforts of the company to calm down the sentiments and concerns of its investors about the strength of its balance sheet.
On the other hand, stocks of Amazon saw an increase in of 1.38 per cent driven by rising speculations among investors about the prospects of the e-commerce giant furthering its France which is also the third largest market in Europe.
(Adapted from IG.com)