After the commotion caused by yesterday’s rumours of a possible takeover, the CEO of Belgian DIY chain Brico wants to put the record straight. Yes, his 152 stores are for sale. No, a new owner has not yet been found. And yes, he knows where the confusion comes from.
Yesterday morning, Belgian newspaper De Tijd sent shockwaves through the DIY sector in the Benelux with its article on a possible sale of the DIY group Maxeda (which includes Brico for Belgium and Luxembourg and its Dutch counterpart Praxis.
With its 152 stores over three formats (Brico itself, Brico City and Brico Planit), the chain is market leader in Belgium. Its turnover of 808 million euros earns it a market share of 40 %. However, despite these results, De Tijd reported that Maxeda’s owners (a group of four private equity funds) were looking to sell Brico and possibly Praxis as well.
The newspaper went as far as to point to two possible candidates for an acquisition: German Hornbach and French Leroy Merlin, both of which are currently not active in Belgium. The latter left the country in 2003, selling its Belgian stores to… Brico. An acquisition by its Belgian rivals Hubo or Gamma was called “unlikely” as the combination would be too strong a power on the Belgian market.
A better explanation
However, Brico CEO Patrick Vandenbogaerde told RetailDetail editors that Brico is “unfortunately” not close to a takeover. He does have an inkling where the rumours have started: “Last year, Maxeda initiated talks with Castorama and Leroy Merlin to jointly buy private labels. A sourcing agreement was eventually reached with Leroy Merlin, allowing private label brands from the French chain to be found in Brico and Praxis shops.
These talks also included visits by “very many Leroy Martin buyers” to Brico stores, while Belgian and Dutch employees also visited the French chain’s latest store concept at Rosny-sous-Bois, among others. “That is probably how the rumours started”, the CEO assumes.
Moreover, he is surprised that the rumours about a possible sale have resurfaced. “That just is not news”, Vandenbogaerde said: “Brico and Praxis have even been up for sale since 2009, but nobody ever made an offer, not one”. The CEO also explains why his chain is for sale despite the status as market leader: “It is simply a feature of private equity to exit after a few years.”
The cooperation is also bound to expand, as “it is a win-win for both parties”. “People are looking for bargains – just look at the success of Action – and now we can offer products that are both qualitative and cheaper. Leroy Merlin has 37 people dedicated to purchasing , we have just the two. We can only benefit from their know-how and scale.”