Guilbert S.A.

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Guilbert S.A.

126 Avenue du Poteau
F-60451 Senlis Cedex
France
Telephone: ( + 33) 3 44-54-54-45
Fax: ( + 33) 3-44-54-55-99
Web site: http://www.guilbert.fr

Wholly Owned Subsidiary of Pinault-Printemps-Redoute S.A.
Incorporated: 1959 as Entreprises Marcel Guilbert S.A.
Employees: 7,128
Sales: EUR 1.5 billion (US $1.41 billion) (2000)
Stock Exchanges: Euronext Paris
Ticker Symbol: GUI
NAIC: 4221 Paper and Paper Product Wholesalers; 422110 Printing and Writing Paper Wholesalers; 422130 Industrial and Personal Service Paper
Wholesalers; 322299 All Other Converted Paper Product Manufacturing

Guilbert S.A. is Europe’s leading office supplies provider. Fully owned by retailing and distribution giant Pinault-Printemps-Redoute (PPR) S.A., led by François Pinault, Guilbert has pursued an international expansion strategy focused on its European base. The company offers more than 9,500 products, nearly 2,500 of which are marketed under its own Niceday brand launched in 2001. The company’s products span the entire range of office supply goods, from paper to furniture and fixtures, targeted at the corporate, rather than consumer, market. With more of its clients seeking global solutions for their office supply needs, Guilbert has entered into an agreement with the United States’ Boise Cascade—one of the world’s largest office supply products distributors—to acquire that company’s European operations, which include mail-order group JPG, Neat Ideas in the United Kingdom, and Kalamazoo in Spain. The agreement also called for the establishment of a joint venture to provide global capabilities for the two companies’ largest customers. Guilbert, whose shares were withdrawn from the Euronext Paris stock exchange after PPR completed its holding in the company in 2000, posted EUR 1.5 billion in sales that year. The company is led by CEO Jean-Charles Pauze and President and PPR Chief Executive Serge Weinberg.

Retail Beginnings in the 1950s

André Guilbert opened up a stationer’s shop in the town of Roubaix, France, in 1955. By 1959, however, the Guilbert family had begun to expand beyond retail into office supply distribution. In that year, the family incorporated its growing operations as Entreprises Marcel Guilbert S.A. The company continued to develop its distribution activities through the next decade, abandoning its retail operation to focus on direct sales. The company hired a highly motivated direct sales force, without base salaries, company vehicles, or expense accounts. Instead, its salespeople were paid on commission only. The commission, however, was on gross orders and thus the prospect for high earnings was strong. By the 1990s, some of Guilbert’s salespeople were earning the equivalent of $12,000 per month and more.

Joining the company in 1965 was André Guilbert’s son-in-law, Philippe Cuvelier. Together, the Guilbert family built the company into a major force in the French, and then European, office supply market. Cuvelier was to take the position of president of the company in 1992, and to lead its international expansion, before stepping down in 1998.

Guilbert moved its office supply distribution business to new headquarters in the town of Senlis in 1970. The following year, the company made the first of a long series of external expansion moves, merging with the paper firm Papeteries Esnor, based in Reims. This company, as with other acquisitions to follow, was to remain a separately operating subsidiary, supplying the parent company, until a restructuring in the late 1980s.

The absorption of the Esnor company was followed with that of carbon-paper producer Compagnie Française des Carbonnes, based in Bayonne, in 1973. Paper wholesaler Comptoir de la Papeterie was added three years later, giving the company a base in Grenoble as well. In 1978, Guilbert expanded again when it acquired office supply distributor Diffusion Européenne de Papeterie, in Reuil-Malmaison.

Guilbert was also pursuing organic expansion in the 1970s. The company began opening regional sales agency offices in 1977, with the first in the city of Lyon. Other offices were to follow as the company sought to build a national presence. After opening an agency in Rennes in 1980, the company turned to Strasbourg in 1984, then to Bordeaux and Aix in 1987. Many other offices and distribution platforms were added through the rest of the decade, giving Guilbert a presence throughout France in cities including Reims, Poitiers, Caen, Toulouse, Orléans, Nice, and Besançon. The company also established a new subsidiary in 1981, Papeteries du Midi, based in Marseille, giving it a strong base from which to supply France’s Mediterranean market.

European Leader in the 21st Century

Guilbert gained steadily in the highly fragmented office supplies market in France during the 1980s. A series of new acquisitions helped it to grow into the domestic leader. The company started the decade with the purchase of Romainville-based Novel-Carbel, a specialist in office automation products, acquired in 1981. In this way, Guilbert responded to the growing demand for computer supplies and equipment. After buying new warehouse and distribution facilities near its Senlis home base in 1982, Guilbert turned toward Paris, acquiring office furniture, fittings, and interiors supplier Excelsior in 1983. In order to help finance its growth, Guilbert took a listing on the Paris stock exchange’s secondary board in 1984, transferring to the main board only in 1994.

Guilbert restructured much of its French organization in 1989, consolidating its subsidiaries Diffusion Européenne de Papeterie, Compagnie Française des Carbonnes, Comptoir de la Papeterie, and Papeteries Guilbert Esnor into the parent company. By now the leader of the French office supplies market, the company began to prepare its international expansion. One of its first moves towards becoming the European leader was the purchase of a 20 percent stake in Spanish stationery and office supplies distributor Kanguros, a stake the company sold off again just three years later.

Nonetheless, Guilbert, which received a new president when Philippe Cuvelier took over the company’s leadership, began to build its foreign position in earnest at the beginning of the 1990s. In 1991, the company acquired the Belgium company Robal; the following year, Guilbert moved into the larger U.K. market, with the purchase of office supplies distributor Ofrex, founded in 1936 and based in Stockport. Ofrex was to become the vehicle for Guilbert’s further expansion into the U.K. market, which found itself in disarray with the deep recession of the early part of the decade.

Guilbert’s transfer to the Parisian exchange’s main board in 1994 was to help the company’s expansion drive in the mid-1990s. The company, which posted sales of more than FFr 2.5 billion in 1995 quickly doubled in size—topping FFr 5.6 billion by 1997. Much of this growth came from its international development, particularly with the acquisitions of British office supplies and commercial printing businesses Esse and Arkle, both in 1995, and of Germany’s Schacht & Westerich that same year.

The year 1996 was to prove a turning point for Guilbert. In that year the company formed the 3G joint venture with mailorder giant 3 Suisses to acquire JM Bruneau, a mail-order supplier of office supplies and equipment, posting approximately FFr 1 billion in revenues per year. The company added to its operations in Germany with the acquisition of Walther & Sohn. But Guilbert’s biggest coup came in April 1996 when it paid more than FFr 1 billion to acquire the struggling Business Supplies Ltd., a subsidiary focused on supplying the corporate market built up by bookseller WH Smith through a series of acquisitions during the 1990s. The addition of this unit added nearly FFr 1.3 billion to Guilbert’s sales, and also gave it a new brand name, Niceday, which had gained success in the United Kingdom with its Snoopy-like cartoon dog mascot.

The newly enlarged Guilbert was now able to claim leadership in the European office supplies market, with the number one spot in both France and the United Kingdom, and a place among the leaders in the German market as well. Yet the arrival of new competition—notably the U.S. giants Office Depot and Staples—on the European continent forced Guilbert to turn to deeper pockets in order to help it secure its leading position. In 1998, the company—and the Guilbert family—agreed to sell a 56.5 percent majority stake to the Pinault-Printemps-Redoute S.A. (PPR) retail empire led by François Pinault and Serge Weinberg.

PPR already held such retailing and mail-order giants as Fnac, La Redoute, and furniture and appliance seller Conforama. With the highly fragmented European office supplies network worth an estimated FFr 150 billion (more than $20 billion), the acquisition of Guilbert instantly gave PPR the European leadership in this market as well. Guilbert, meanwhile, gained access not only to PPR’s deeper pockets, but also to the expertise of its other units, such as in computer supplies, through Fnac, and office furniture, through Conforama, and particularly in the mail-order field, through La Redoute.

Until then Guilbert had focused primarily on its higher-cost direct sales organization, continuing to open sales agencies throughout France during the decade. The rising popularity of Internet-based marketing and the ending of many trade restrictions among the European Community’s member countries were combining to challenge traditional sales methods. Guilbert stood to gain from its new majority shareholder; the Guilbert family members, however, were less fortunate. Soon after their company’s acquisition, Philippe Cuvelier, who had tripled the company’s sales in just five years, was replaced by a new CEO and president, Jean-Charles Pauze, who came to the company from Strafor-Steelcase.

Company Perspectives:

Guilbert’s strategy is to strengthen its European leadership and develop multi-channel distribution .

Guilbert, which had been building its presence in Spain, Italy, and Belgium during the decade, now turned to the Dutch and Portuguese markets. In 1999, the company acquired the Netherlands Kantic, and Portugal’s Sete. With these acquisitions, the company’s international sales now accounted for 60 percent of its total revenues. That figure was boosted still higher in 2000, when Guilbert gained control of Germany’s Hutter. This acquisition gave Guilbert the number two position in the German office supplies market.

By then, PPR had increased its position in the company, to more than 91 percent in 1999 and to full control in 2000. Guilbert was delisted from the Paris stock exchange and structured as a wholly owned subsidiary of PPR. Soon after, Guilbert made a new move to reaffirm its European dominance—and to give it a foothold in the increasingly global market for office supplies. In September 2000, the company reached an agreement to acquire Boise Cascade Office Products (BCOP)’s European operations, which included the mail-order specialist JPG, active in France and Belgium and via the Internet, and the office suppliers and distributors Europa, Kalamazoo, and Neat Ideas, strengthening Guilbert in a number of European markets, including Spain, Germany, Italy, Belgium, and the United Kingdom.

The terms of the BCOP acquisition also featured a cooperation agreement between the two companies to create a global product range available to the two companies’ globally operating customers. Boise Cascade was to become responsible for customers’ needs in the North and South American markets, while Guilbert was to handle those same customers’ orders in Europe.

Guilbert moved into the new century with a secure position as Europe’s leading office supplies specialist. It had also gained a place at the table with the largely U.S.-based leaders of the global market. That market was set to grow still further as e-commerce activities were expected to increase in the early years of the century. Guilbert took steps to position itself to capture a share of that market, too, grouping its small and home office e-commerce business around its JPG web site, while launching, in July 2001, its Guilweb e-commerce site for mid-to large-sized corporations. The company revealed ambitious goals for these projects, forecasting that as much as 25 percent of its sales were to come from its electronic ordering facilities by the year 2004.

Principal Subsidiaries

Guilbert Allemagne (Germany) ; Guilbert Belgique (Belgium) ; Guilbert Espagne (Spain) ; Guilbert France; Guilbert Irlande (Ireland) ; Guilbert Italie (Titanedi) (Italy) ; Guilbert Pays-Bas; Guilbert Portugal; Guilbert UK; JPG; JPG Belgique (Belgium) ; Kalamazoo (Spain) ; Mondoffice (Italy) ; Neat Ideas (U.K.) .

Principal Competitors

Arjo Wiggins Appleton p.l.c.,; Boise Cascade Office Products Corporation; Buhrmann NV; David S. Smith (Holdings) PLC; IKON Office Solutions, Inc.; International Paper Company; Manutan International SA; Moore Corporation Limited; Office Depot, Inc.; OfficeMax, Inc.; Online Office Supplies Company; Grupo Picking Pack, S.A.; Quill Corp.; United Stationers Inc.

Key Dates:

1955:: André Guilbert opens an office supplies store in Roubaix, France.
1959:: Company incorporates as Entreprises Marcel Guilbert S.A. and enters office supply distribution.
1970:: Headquarters are transferred to Senlis.
1971:: Guilbert acquires Reims-based Papeteries Esnor and enters the stationery market.
1983:: Company moves into office furniture market with purchase of Excelsior, based in Paris.
1984:: Guilbert takes a listing on secondary market of the Paris stock exchange, opens sales agency in Strasbourg.
1989:: Company reorganizes holdings with absorption of Diffusion Européenne de Papeterie, Compagnie Française des Carbonnes, Comptoir de la Papeterie, and Papeteries Guilbert Esnor; acquires 20 percent of Spanish office supplies and stationery firm Kanguros.
1992:: Guilbert acquires Ofrex Supplies and enters the U.K. market, sells Kanguros stake.
1996:: Company steps up international expansion with acquisitions of Niceday, the office supply division of WH Smith, Germany’s Walther & Sohn, and mailorder office supplies specialist JM Bruneau.
1998:: Pinault-Printemps-Redoute acquires 56.5 percent of Guilbert’s shares.
1999:: Guilbert boosts European presence with purchases of Kantic and Sete.
2000:: Acquires German office supplies provider Hutter Group to capture second position in that market; Pinault-Printemps-Redoute acquires 100 percent of Guilbert; acquires European office supply operations from Boise Cascade, adding JPG, Europa, Kalamazoo, and Neat Ideas brands, and signs international cooperation agreement.