Accor chief ousted to speed up turnaround

Accor chief ousted to speed up turnaround

Accor chairman and chief executive Denis Hennequin was ousted yesterday and a transition team put in charge of Europe's largest hotel group amid a disagreement over the pace of change.

The French hotel giant named chief operating officer Yann Caillere as chief executive, while board member Sebastien Bazin, the head of Colony Europe, was named vice-chairman to replace Philippe Citerne, who becomes non-executive chairman.

Hennequin is the third chief executive to be ousted from Accor, the world's fourth-largest hotelier, since US investor Colony Capital invested in the group in 2005.

Private equity firm Eurazeo SA joined Colony at Accor in 2008 and together they own a combined 21.4% of the capital and command four board seats.

Sources have said the stakeholders were losing patience with the weak performance of Accor shares, down nearly 5% this year, and wanted to speed up asset sales and franchising to boost returns for investors.

Hennequin was hired in 2010 to accelerate an "asset-light" strategy of reducing Accor's exposure to capital intensive owned hotels in favour of franchises and management contracts.

He sold loss-making US budget hotel Motel 6 for $1.9 billion and turned Accor, whose brands range from the luxury Sofitel chain to budget-oriented Ibis, into a pure hotel player, selling gourmet caterer Lenotre and a stake in casino group Lucien Barriere.

Hennequin launched a three-year plan to reduce Accor's exposure to a weak Europe, stepping up expansion in emerging markets and cutting costs, while accelerating its move toward franchising or managing hotels for others to boost profit margins.

Accor said: "The directors came to the joint conclusion regarding the group's situation: that the strategy adopted is the right one and that it will remain unchanged.

"However, given current economic conditions and the rapid transformation of its competitive environment, Accor must accelerate the implementation of this strategy in order to reinforce its positions."

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