French Mail Order Houses Expand Abroad

PARIS – French mail order companies continue to expand their international activities across Europe, into Asia and even into the US where PPR blazed the trail last year through its acquisition of Brylane.

The French still aren’t sure about their success abroad, and even less sure about globalization. Some, like the giant Damart are only now recovering from domestic problems that spilled over into their foreign operation.

But Mantuan International, an industrial equipment house that is tops in the still underdeveloped French BTB field, already makes 60 percent of its turnover in the 13 European countries where the company is active.

Manutan’s sales at home and abroad last year reached 344 million euros (euro and dollar are almost at parity although the currencies fluctuate on a daily basis), up 5 percent in the 1998-99 business year that ended Sept. 30.

Jean-Pierre Guichard, the company’s president, expects to do much better over the next couple of years. He is looking for sales of 3 billion French francs (about $500 million at today’s exchange rate) by 2002.

Internationalization comes first in Guichard’s plans to boost revenues, and he told Annie Rigoureau of Catalogue’s, a French DM newsletter, that he has a billion francs with which to buy other companies.

Acquisition was key to his European strategy. He is buying Metro Storage Systems in Ireland and Kraus in Austria, firms with combined sales of 9 million euros.

He bought Plus en in the Czech Republic, Fabritec in Switzerland and Euroequipment in the UK, a company with 10 million in euro sales.

A start-up in Finland last March gave the company an anchor in northern Europe. It has 18 branches and subsidiaries in France and abroad, and has divided Europe into four marketing regions with very unequal returns.

Thus the Scandinavian market accounts for 5 percent of total sales, an increase of 11 percent; UK and Ireland contributed 13 percent, up 6 percent; Germany, Benelux, the Czech Republic and Switzerland 40 percent, up 7 percent; and the “South” – France, Italy and Portugal 42 percent.

French analysts believe the company will use its billion franc war chest to expand outside Europe, and they think Manutan will try the US first. It had no comment.

Damart is a traditional retailer and cataloger in France and abroad that is only beginning to emerge from a period of growing losses and other problems. But it, too, is relying on foreign business.

More to stay afloat than as contribution to profits, to be sure, but as CEO Robert Salvanet told Rigoureau Damart International, the company’s textile branch, had sales of 2.6 billion francs (about $400 million) with most of that turnover coming from outside France.

Damart is active in Austria, Belgium, Switzerland and Great Britain with the British base responsible for a foothold in the US. Damart also does business in Japan and Australia.

Problems abroad are not fundamentally different from those he faces at home, Salvanet said, but added that “each market is structured differently and sometimes the competition is tougher.”

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