PARIS — Cnova NV, the E-commerce arm of French retailer Casino, said it had decided to defer an earlier fund-raising plan, and could no longer confirm financial guidance given in June due to challenging third quarter business conditions.
In June, Cnova had unveiled plans to raise around 300 million euros ($346.50 million) by the end of the year in a sale of new shares, to fund growth and boost its proportion of freely tradeable stock.
“In a timid 3rd quarter market, we confirmed our relevant positioning with a strong ecommerce platform benefiting from a growing loyal customer base and the acceleration of our digital marketing solutions,” said Cnova CEO Emmanuel Grenier.
“In this soft market, we have launched several actions to maintain our growth dynamics. In light of this situation, Cnova is no longer in position to confirm its guidance released in June,” added Grenier.
In June, Cnova said it was targeting an EBITDA of 160 million euros for 2021, a rise of 20% from 2020.
Cnova’s Cdiscount website competes with international groups such as Amazon in France>, with a marketplaces-style platform that links shoppers with third-party vendors selling household goods, electronic equipment and toys.
During the third quarter Cnova posted a 7.5% rise in Gross Merchandise Volume (GMV) in a soft market, which it partly blamed on the re-opening of brick-and-mortar stores as COVID restrictions eased. This notably forced it to boost its pricing competitiveness.
Cdiscount is fully controlled by Cnova, which in turn is 65% controlled by Casino and 34% by Casino’s Brazilian business Grupo Pao Acucar.
Parent company Casino, run and controlled by Jean-Charles Naouri, has been looking to boost its profitability and cash flow with asset sales, as well as finding savings through purchasing deals.
Naouri has been looking to ease the debts of both Casino and Rallye, the holding company behind the retailer.
($1 = 0.8658 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)