PARIS (Reuters) - French retailer Casino (CASP.PA) said on Monday it had signed a franchising contract with a small chain of French supermarkets to extend its reach in the Paris region and boost revenue as it grapples with large debts.
Under the deal, the 12 supermarkets operated in the Paris region by the Quatrucci family under the brand O’Marche Frais will transfer part of their estimated 300 million euro (264.1 million pounds) annual revenue to Casino while they use Casino’s supply chain and logistics, Casino said in a statement.
The shops will carry Casino brands and sell some of its products. O’Marche Frais is currently in a franchise agreement with cooperative French retailer Systeme U.
Casino, whose shares have slumped this year due to concerns over its debt as well as those of its parent holding group Rallye (GENC.PA), has announced several measures in recent weeks to raise cash, including the sale of 1.5 billion euros worth of assets.
Casino reported net debts of around 5.4 billion euros during its interim results in July, while the company has a market capitalisation of around 4 billion euros.
The group’s situation has been made worse over the past couple of years by cut-throat competition in France, its largest market, which has forced retailers to lower prices sharply, reducing their profit margins.
Reporting by Inti Landauro; Editing by Luke Baker