PARIS, Sept 19 (Reuters) - French retailer Casino and furniture chain Conforama, owned by South African group Steinhoff, have forged a cooperation agreement to use a combined 1.3 billion euros ($1.45 billion) of purchasing power to boost efficiency.
The Mano purchasing venture, covering household appliances from white goods to lighter electricals such as televisions and computers, will be up and running by Dec. 1, ahead of annual price negotiations with suppliers, officials from the two businesses told Reuters.
The operation is expected to generate annual savings of 30 million euros in the medium term.
“Overall it’s a response to the growing concentration among suppliers and among our competitors,” one Casino official said.
Casino, the credit rating of which was cut to junk status by Standard & Poor’s in March, is under pressure to show it can make a sustained profit revival in France, its top market, at a time of slower growth in Brazil.
In July it told investors it was on track to achieve its full-year target of a rise in profit, helped by higher sales and cost savings.
Casino already cooperates with non-listed French peer Intermarche in purchasing for national food brands under a deal sealed in 2014.
The new alliance comes after Conforama lost out to CD and book retailer Fnac in a fierce takeover battle for electronics goods group Darty.
Conforama has 203 stores in France and Casino 10,627. Casino notably owns e-commerce discounter CDiscount, which makes 80 percent of its sales in non-food goods, as well as the Geant hypermarkets, Monoprix and Casino supermarkets.
Casino shares were up 2.3 percent at 43.66 euros by 0953 GMT, outperforming a 1 percent gain for the European retail sector as a whole. ($11 = 0.8964 euros)
Editing by David Goodman