As of the 15th November 2010, Remy Cointreau SA has hired the French bank Credit Agricole to find a buyer for its unprofitable Champagne business.
Remy have said that the sale of the unit, which includes the brands Piper-Heidsieck and Charles Heidsieck, should raise at least 430 million euros for the Paris based company. Back in June of this year, the maker of world famous Cognac Rémy Martin reported that the Champagne side of the business had brought about losses of 23% in the year 2009/2010 – although they aim for it to return to profitability within the current year.
Get rid of Champagne and concentrate on Cognac
A spokesman for Remy said that it makes sense to put this unit up for sale. In the current economic climate it is logical to sell the less productive unit and re-deploy the capital to regions with better performance, therefore accelerating growth and improving returns to shareholders.
Remy Cointreau shares are up 46% this year, driven particularly by sales in China where Cognac sales have risen by 30%. Remy stress that there is no urgency in the sale and will take time to find the ideal purchaser. The two Champagne houses are prestigious brands and deserve to go to a buyer who can breathe the life back into them. When Remy originally purchased Piper-Heidsieck back in 1988, they paid 1223 billion francs – which was a record at that time.
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Sources: businessweek.com, bloomberg.com