June 29, 2018 / 10:40 AM / 5 months ago

French group Rexel to shake up portfolio of businesses to tackle Amazon

PARIS (Reuters) - French electrical parts distributor Rexel (RXL.PA) is in the process of developing certain strategies to deal with challenges posed by Amazon (AMZN.O), including changes to its portfolio of businesses, its chief executive told Reuters in an interview.

Rexel and others in its sector are having to face so-called “disruptive technologies” developed by Amazon and similar tech giants, and CEO Patrick Berard said Rexel would examine its range of businesses to adapt accordingly.

“We are certainly going to move on, in the years to come, towards a more active management of our portfolio - which is to say that every year I don’t rule out selling certain assets, while also buying others,” said Berard, who also stated that Rexel was sticking to its current financial targets.

“I think that the world is going to change and so we will need to be a bit more flexible, know how to stay in one line of business but also be ready to sell out of another in order to develop elsewhere,” he added.

Amazon has made in-roads in the field of electrical goods, and has targeted the business customers part of that market.

Rexel, whose principal shareholder is activist fund Cevian with a near 16 percent stake, has been undertaking a strategy of selling off non-core assets under Berard.

Berard said Rexel ought to have around 650 million euros ($757.5 million) worth of sales in this regard by the end of 2018 - compared to an initial target for 800 million euros worth of asset disposals.

Berard added that Rexel had some “interesting contacts” regarding possible acquisition targets in the United States, one of its main markets, but declined to provide further details.

($1 = 0.8581 euros)

Reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta/Jean-Michel Belot

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