Subway split: many goals, few have been filled

The Ceconomy electronic channel (Media Markt, Saturn) and the Metro grocery store with the eponymous hypermarkets and the Real supermarket chain. However, many hopes badociated with this split have not yet been fulfilled.

This is reflected in the stock market price. If Metro action was trading at more than 29 euros immediately before the split, the shares of successor companies listed this week together under 19 euros. In particular, the share of the new metro lost a lot in value.

One reason: The group shocked the stock market in the spring with a profit warning – triggered by mbadive problems in the important Russian case and the ongoing pay dispute at the real supermarket subsidiary. Ceconomy, on the other hand, had to face a disappointing holiday season.

Schnitt makes more sense than ever

Nevertheless, on the occasion of the anniversary of the split on July 12, the tips of both companies continued to be convinced of the benefits of separation. The boss of Metro, Olaf Koch, told the German news agency: "The step of dividing the two companies makes even more sense in today 's perspective. " Competition in the retail trade has intensified further. It was important that companies could focus on their own problems. "Since any distraction from the core business is harmful."

Pieter Hbad, CEO of Ceconomy, is still convinced of the benefits of the split: "Our strategy is right and we have a clear plan, we work steadily". Anniversary in a letter to employees.

Thanks to the split, companies initially hoped for more growth and more market value. More growth as separate companies could better focus on their respective customer groups and act more dynamically. More market value, because conglomerates like the former Metro on the stock market are generally rated worse than the clearly targeted companies.

Metro fights

But the path turns out to be more difficult than expected. Especially the metro must fight. "We made mistakes in the Russian market, which is why we left springs," says Koch. The group had scorned Russia with a bad customer pricing strategy. Still on the domestic market, the group has problems. Efforts to negotiate with the Verdi union on a new pay structure in Real have failed. Now, the subway is trying to use the crowbar to reduce the salaries of newly hired employees. However, the company has not yet achieved its goals for this strategy this year.

But subway master Koch sees the bottom now gone. In Russia, the company took the helm with a new direction. "I am absolutely certain that we will improve our business in Russia in the near future," he says. However, experience shows that it will take several months for the effects of the new strategy to be reflected in the numbers. International trade outside of Russia is fine anyway.

Essential conditions were created for Real

Real also sees the manager on the right track. The development of a sustainable business model, growing online presence and now competitive cost structures have met the essential conditions of a positive development.

Ceconomy also started self-employment with some luggage, but has already done some of her homework. Thus, Redcoon, the weakening online retailer, has been settled, a solution found for deficient companies in Russia and the problems in Turkey. In addition, the Group has taken its first steps towards the international consolidation of the electronics industry through its participation in the French electronic distributor Fnac Darty and its entry into the Russian competitor M.Video.

But there is still much to do at Ceconomy. The activity in Sweden still works badly. The ongoing conflict with the heirs of media co-founder Erich Kellerhals continues to dissipate. And the 10% stake in the metro, which Ceconomy once received as a dowry, weighed on the company given the weak performance of the stock price. A few weeks ago, Ceconomy received fresh money with a capital increase to gain some margin.

In his letter to colleagues, Haas wrote: "We want to go up and we want to stay at the top." We are still far from the summit cross.

In the video: Experts warn: The reversal of interest rates threatens to become a nightmare