DUESSELDORF (Reuters) - German telecoms company Freenet said it remains committed to its investment in Ceconomy, Europe’s biggest consumer electronics retailer, despite a profit warning that prompted the departure of its chief executive last month.
“I still believe in the company,” Freenet Chief Executive Christoph Vilanek told Reuters in an interview, adding that the firm was sticking to its around 9 percent stake in Ceconomy that it took in June via a rights issue.
Last month Ceconomy said its chief executive was leaving after a profit warning sent its shares tumbling. It also reported a 3.8 percent drop in sales in its fiscal fourth quarter, which it blamed on unusually hot weather.
Vilanek said he is not currently pushing for a board seat with the company, but that could change if Freenet’s views are not heard.
Ceconomy, which runs more than 1,000 Media Markt and Saturn stores across Europe, has seen its business stagnate as sales of consumer electronics have shifted online.
Vilanek said while Ceconomy should not allow the leadership vacuum to affect the important Christmas trading season, it should also not race to find new management, adding he does not expect appointments before Christmas.
He said Freenet had not invested in Ceconomy primarily in the hope for a share price rise, but rather to use its stores to sell mobile phone contracts.
He believes Ceconomy must allow individual stores more freedom, but do more to centralize logistics and warehouses.
Reporting by Matthias Inverardi, writing by Emma Thomasson; Editing by Thomas Seythal and Jan Harvey