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Mr. Bricolage S.A.

 


Address:
1 rue Montaigne
45380 La Chapelle Saint Mesmin
France

Telephone: (+33) 02.38.43.50.00
Fax: (+33) 02.38.43.11.58
http://www.mr-bricolage.fr

Statistics:
Public Company
Incorporated: 1968 as ANPF (Action nationale des promoteurs du faites-le vous-même); 1995 as Mr. Bricolage S.A.
Employees: 4,859
Sales: EUR 916 million ($900 million)(1999)
Stock Exchanges: Euronext Paris
Ticker Symbol: 7568.PA
NAIC: 444130 Hardware Stores


Company Perspectives:


The five-year objectives of the Mr. Bricolage group: Develop a network of 560 stores under the Mr. Bricolage name with 350 members in France, 150 international members, 50 stores in France and 10 stores internationally owned by Mr. Bricolage S.A. This development will be accompanied by a significant investment program.


Key Dates:


1964: An information exchange group is organized among independent hardware stores in France.
1968: The cooperative ANPF is formed.
1980: Mr. Bricolage brand name is launched.
1989: The Bricotruc store format is introduced.
1990: First foreign store opens in Portugal.
1992: Store opens in Spain,
1993: Launch of Mr. Bricolage branded product range.
1995: ANPF converts to Mr. Bricolage S.A.
2000: Public offering on Euronext Paris secondary market; launch of new large-scale store format.


Company History:

Mr. Bricolage S.A. has all the right tools for building France's fourth-largest chain of do-it-yourself hardware stores. As the publicly listed holding company for the cooperative network of 326 independently operated Mr. Bricolage stores, Mr. Bricolage S.A. was originally known as the ANPF (Action nationale des promoteurs du faites-le vous-même). The ANPF was a cooperative organization that, as a holding company, converted its status in 1995 to that of a limited liability company in order to be able to raise outside capital. Since then, Mr. Bricolage S.A. has built its own network, in addition to continuing in its capacity as purchasing and distribution center for the entire Mr. Bricolage network of stores. In addition, it has been responsible for coordinating the group's strategy, marketing and communications program, and employee training. Mr. Bricolage S.A. also coordinates the group's range of some 5,000 Mr. Bricolage brand label products--a number expected to double by 2004. The company also produces and distributes its own magazine, with a circulation of some 80,000 per issue.

Do-It-Yourself Club in the 1960s

The origins of Mr. Bricolage lay in the stirrings of France's do-it-yourself (DIY) market in the 1960s. The extended economic expansion in France as the country rebuilt after World War II had also brought more leisure time to the people--and a new spirit of leisure activities. More and more people were turning to a new hobby--that of `bricolage,' a term which quickly encompassed every level from the simple tinkerer to full-scale home renovation and construction projects, including interior decorations and fittings. More and more traditional hardware stores began to cater to this new breed of customer, expanding both their product range and their level of customer assistance. Many stores, such as Castorama (later a market leader), looked toward their American counterparts for inspiration and imported the so-called 'category killer' concept (vast warehouse stores with extensive product ranges) to France.

During the 1960s, a number of France's hardware stores catering to the DIY market started an association to encourage the growing DIY market. Created in 1964, the group operated more or less informally, and consisted primarily of individual and small groups of stores operating under various names such as Kit, Leroux & Fils and Tout Pour le Bricoleur ('Everything for the DIY'er). But by the end of the decade, the group had formalized their association as the cooperative ANPF, or Action Nationale des Promoteurs du Faite-le-vous-même, the direct French translation of `do-it-yourself.'

The ANPF had originally formed as an information exchange, and the cooperative quickly transformed into a centralization force for the group's individual members and their stores. The ANPF began coordinating purchases--obtaining better prices with larger orders--while the individual stores continued operating under their former store names. Among those joining the cooperative was Maurice Vax, himself owner of two DIY stores.

If the DIY market had flourished as a leisure market in the 1960s, it took on new steam in the 1970s. The Arab Oil Embargo and the resulting worldwide recession ended some 25 years of economic expansion in France. The tightening economy was to lead still greater numbers of people into the DIY market--not simply as a leisure pursuit, but also as an economic necessity. Before the end of the decade, many were referring to the DIY market as France's national hobby.

The country's retail market was also changing. Where France had once relied on its small, independent merchants, the new retail scene featured growing numbers of regional and national chains and large-scale store formats. These included the so-called `hypermarkets,' which functioned as combined grocers and department stores. As the French shopper became used to the extended range of products found in the large-scale format, most retailers were forced to follow suit, developing warehouse-style and category killer concepts for most retail segments. The DIY market was among the fastest growing sector, and by the end of the 1970s a number of national chains--including Leroy Merlin, Castorama and Lapeyre--had begun to dominate the marketplace, crowding out the country's smaller independent merchants.

The members of the ANPF had also come to feel the threat of the new competition. While their larger competitors fought for the country's large urban markets, the ANPF members saw the benefits of specializing on the country's small and mid-sized markets, with populations ranging from 20,000 to 80,000. Yet the cooperative had also started to feel the need to create a more unifying and recognizable brand in order to compete against its larger, national rivals, which were quickly attracting consumers away from their local markets to a growing number of vast retail parks located on the outskirts of the country's urban centers.

Call Me 'Mr.' in the 1980s

In 1980, the members of the ANPF cooperative decided to group their stores under a single, nationally identifiable brand name. While maintaining their independent status, the retailers sought to introduce not only a unifying brand, but also a national advertising and marketing strategy as well. The ANPF looked for a name for their proposed network, scouting the existing retail landscape. As Vax explained to Capital: 'The furniture retailers had created Mr. Meuble. So why not Mr. Bricolage?'

So the title became Mr. Bricolage--and during the 1980s, the new national chain quickly built a national brand reputation, making it one of the country's best-known brands. The ANPF membership was also growing quickly, as more and more independent retailers turned to the group--with its centralized purchasing and marketing and communications programs--in order to compete against the growing number of large-scale chains. Still, the members retained their independence, to an extent.

During the mid-1980s, the ANPF's role in the Mr. Bricolage network expanded to include employee training initiatives. Indeed, the Mr. Bricolage name was soon to become synonymous with its highly trained sales staff offering a high-degree of personalized assistance to their customers. In this way, the network was able to set itself apart from its competitors. The company's training program became one of the country's most ambitious, with employees--most often themselves dedicated DIY'ers--with total man-hours reaching nearly 9,000 hours by the beginning of the new century. Mr. Bricolage also served to train store managers, to serve the growing number of ANPF members who operated multiple stores. The Ecole Mr. Bricolage formed the partnership in the Ecole Nationale de Distribution Spécialisée, to extend its training program to other retail groups.

The success of the Mr. Bricolage brand led to the creation of a second brand--Bricotruc--in order to place the cooperative's smaller stores under the same banner. Serving the country's rural and agricultural towns and villages, with populations ranging from 4,000 to 7,000 residents, and with store formats averaging less than 600 square meters, the Bricotruc stores featured the same product categories as the larger Mr. Bricolage stores. Launched in 1989, the Bricotruc chain added to the ANPF's growing membership of some 300 total stores at the beginning of the 1990s.

At the same time, the cooperative had also begun to export its brand name. In 1990, the first foreign Mr. Bricolage opened in Lisbon, Portugal, and was directly owned by the ANPF. Two years later, the group decided to enter the Spanish market as well. This time, however, the ANPF formed a local partnership, taking a 51 percent share in the newly created ANPF Espagne, and opened its first Spanish store in Malaga. Through the 1990s, Mr. Bricolage turned to other European markets, including Belgium and Turkey, and then looked farther abroad, licensing the Mr. Bricolage name and concept to independent retailers in Azerbaijan and Uruguay.

Obstacles in the 1990s

The housing crisis of the late 1980s, and the beginning of an economic recession in France that extended deep into the mid-1990s, led to a shakeup of the French retail market--and the DIY market in particular. Companies entered a period of consolidation, and before long the market narrowed to a reduced number of clear leaders. Mr. Bricolage had managed to maintain its independence throughout this period, capturing the number four position in the French DIY market. Aiding the group's growth during this time was the highly successful rollout of a range of products featuring the Mr. Bricolage name. Launched in 1993, the Mr. Bricolage product line grew to some 5,000 products by the end of the decade.

Meanwhile, the tightening competition in France during the 1990s--especially as a growing number of French were developing a taste for other leisure pursuits, to the detriment of the DIY market--forced Mr. Bricolage to seek further expansion in order to gain greater economies of scale. At the same time, growing numbers of the ANPF's original members were looking forward to retirement, but, finding no successors, the future of their stores were placed in doubt. The ANPF itself was faced with buying their stores--some 21 stores in all by the end of the 1990s, with the purchase of another 40 member stores appearing likely before the year 2005.

The growing Mr. Bricolage format also played a role in a transformation of the ANPF. After converting the Bricotruc stores to the Mr. Bricolage banner in the mid-1990s, the ANPF began to define a new expanded store format for the future. The cooperative was preparing to meet its competitors on their large urban area turf, and a new Mr. Bricolage format was developed for stores larger than 3,000 square meters--with some stores reaching up to 11,000 square meters. The flexibility of the Mr. Bricolage format--redefined into four store-size ranges--helped the company continue to boost its share of the national DIY market. Because of these new factors, the company needed an influx of capital.

Yet ANPF's cooperative status prevented it from raising outside capital. In order to circumvent this limit, the group decided to `empty' the ANPF and form a new central organization, Mr. Bricolage S.A. As a limited liability company, Mr. Bricolage S.A. was able to pursue outside investors, and quickly sold a 25 percent share to capital risk firm 3I. By then, the total Mr. Bricolage network sales had topped the FFr 4 billion mark.

Growth in a New Millennium

The group's expanded store formats and continued international growth, as well as its strong brand name, helped send sales soaring in the late 1990s. While sales increased to FFr 5 billion in 1997, they soared to reach an expected FFr 6.7 billion (EUR 916 million) by the end of 2000. Aiding the company's growth was a return to vitality for the French economy. In order to take further advantage of this, the group--through Mr. Bricolage S.A.&mdash′epared to make a public offering. The listing, placing the company's stock on the Euronext Paris secondary market, was completed at the beginning of the year 2000, coinciding with the 20th anniversary celebration of the Mr. Bricolage brand. As part of that celebration, the group launched a new store format, placing a new emphasis on home decoration.

Mr. Bricolage S.A. announced ambitious growth plans for the first five years of the new century, proposing to build out the company's network to more than 560, including 350 in France, thereby multiplying by six its international stores, to reach 150 stores. Mr. Bricolage itself, which by then owned 26 stores, expected to continue buying up other Mr. Bricolage stores. At the same time, there were plans to open new stores, particularly as the costs of opening new large-format Mr. Bricolage stores, estimated at some FFr 15 million, had become too heavy a burden for the group's independent retailers. As such, Mr. Bricolage S.A., which continued its central role to the network, also intended to become a major retailer in its own right, with 60 company-owned stores by the year 2004.

Led by president Maurice Vax and CEO Hervé Courvoisier, Mr. Bricolage S.A., set its sights on increasing expansion in the first half of the first decade of the new century. The company was beginning to depart from its traditional focus on smaller cities of populations less than 80,000 to meet its competition--the French DIY market leaders Castorama and Leroy Merlin--head to head in the larger urban centers. Mr. Bricolage's flexible store configuration--four formats ranging from less than 1,000 square meters up to 11,000 square meters--was enabling it to tailor its stores to the specific needs of each local market.

Principal Competitors: Leroy Merlin S.A.; Groupe Castorama-Dubois Investissements; Carrefour-Promodes S.A; Lapeyre S.A.





Further Reading:


Besses-Boumard, Pascale, 'Mr. Bricolage bouleverse son statut pour entrer en Bourse,' Les Echos, November 10, 1999, p. 25.
Bialobos, Chantal, 'Monsieur Bricolage fait son trou,' Capital, June 2000, p. 66.
Lupieri, Stephane, 'Mr. Bricolage s'emancipe,' Enjeux Les Echos, April 1, 2000, p. 78.

Source: International Directory of Company Histories, Vol. 37. St. James Press, 2001.




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