Fnac's merger with Darty, which owns Belgian Vanden Borre and Dutch BCC, is starting to pay off, but there is unrest brewing in Belgium, France and the Netherlands.
Company profit up nearly 25 %
About one year ago, French entertainment group Fnac acquired electronics chain Darty after a power struggle with French furniture store chain Conforama's South African owner, Steinhoff. Based on its first financial results, the merger group got off to a good start: turnover (at level exchange rates) grew 2 % to 7.4 billion euro, while company profit grew 23.1 % to 203 million euro.
CEO Alexandre Bompard described it as "very good" and "a real satisfaction, knowing how much effort went into the merger and the continued averse economic circumstances". Despite the positive news, French labour unions are still worried: they fear Fnac Darty will "cut several hundred jobs" when it reduces its French main offices from two to one later this month. They also want a five-year plan for the company's stores, with job security for every staff member.
Job losses (or even worse)
When it rains (in Paris), it pours (in the Low Countries). An extraordinary general assembly is planned for Belgium on 28 March, with labour unions afraid that jobs will be cut. According to Belgian newspaper Het Laatste Nieuws, the board will announce its intentions to merge its three main offices (Evere - Fnac; Sint-Pieters-Leeuw and Wommelgem - Vanden Borre) into one, making a number of jobs redundant. Fnac Belgium currently employs 380 people and Vanden Borre about 1,250. Of these employees, about 500 work in the main offices.
People at Dutch electronics subsidiary BCC are also worried, despite a 2.4 % Benelux turnover increase to 908 million euro thanks to improved online sales. Fnac Darty indicated the Belgian activities contributed most to that increase and the operational margin drop, from 1.1 to 0.4 % (3.8 million euro), is explicitely blamed on Dutch issues, namely the introduction of a new, but not yet fully functional ERP system.
B2B telecom platform Connexie explains: "Mainly the web shop struggled because of this, but obviously, competition from Media Markt, Bol.com and Coolblue is also relevant in this matter." It remains to be seen how long the main office will continue to finance BCC and whether it will become the next to fall, just like Phone House."