Carrefour Finalizes Deal With Belgium Unions In Restructuring Drive

French retail giant Carrefour SA (CA.FR) Friday moved forward with its restructuring plans in Belgium and said it has signed an agreement with unions there.

"It took a lot of effort and determination to reach this agreement, which is essential to maintain our business in the country," said Carrefour Chief Executive Lars Olofsson.

Carrefour has been in negotiations with unions since February, when it announced plans to restructure operations in the country, cutting staff and shutting a number of stores.

The retailer will close 16 loss-making stores in the country at the end of July. The agreement with unions will result in EUR25 million of labor-cost savings a year starting in 2011, the company said.

Carrefour, the world's second-largest retailer after U.S.-based Wal-Mart Stores Inc.(WMT), will also expand its franchise agreement with the French retailer Mestdagh group, which will take over 16 of Carrefour's supermarkets in Belgium. Mestdagh will also convert 69 supermarkets in the country to the Carrefour name.

The company has recently struggled to hold ground against local competitors Delhaize Group (DEG) and Colruyt (COLR.BT).

Carrefour also said Friday it will invest EUR300 million in revamping its hypermarket, supermarket and convenience stores in Belgium.

Through the restructuring, Carrefour will reduce its number of its hypermarket stores to 45 from 56 at the end of 2009.

-By Mimosa Spencer, Dow Jones Newswires; [phone]; [e-mail]