Camaïeu S.A.

211 av Brame, BP 229
F-59054 Cedex 1
Telephone: + 33 3 20 99 71 13
Fax: + 33 3 20 80 71 70
Web site: http://www.Camaï

Public Company
Incorporated: 1984
Employees: 3,000
Sales: EUR 393.3 million ($450 million) (2004)
Stock Exchanges: Euronext Paris
Ticker Symbol: 7633
NAIC: 424330 Women's, Children's, and Infants' Clothing and Accessories Merchant Wholesalers

Camaïeu S.A. operates one of France's largest chains of women's clothing stores. The company, based in the northern city of Roubais, also has been expanding its network into international markets in the mid-2000s. Camaïeu's store network topped 440 stores at the beginning of 2005—including 69 stores in foreign markets such as Spain, Italy, Belgium, the Czech Republic, Poland and, since 2004, Russia. Camaïeu's stores tend to be small—with an average selling space of just 200 square meters—and focused on the lower mid-range ready-to-wear market. The company has established its reputation as a strong price competitor, rather than as a fashion house. As such the company's stores tend to feature styles inspired by—rather than setting—seasonal trends. Sourcing its goods from low-wage markets including China, Turkey, and the Middle East enables Camaïeu to position itself as a low-cost alternative, while offering reasonable quality. The company owns most of its stores, although a proportion continues to operate as franchises. A public company listed on the Euronext Paris Stock Exchange since 2000, Camaïeu has become the subject of a friendly take-over offer at the beginning of 2005, from private equity firm AXA Private Equity. The offer has enabled the founding Torck and Giraud-Verspieren families to cash out their holdings in the company; however, AXA Private Equity has not yet been able to buy full control of Camaïeu. In 2004, the company's revenues topped EUR 393 million ($450 million).

Retailing Success in the 1980s

Jean-Pierre Torck began his career working for French retailing powerhouse Auchan (Auchan, Decathlon, Kiabi, Boulanger, Leroy Merlin, Flunch, etc.). In 1984, Torck, together with Jean Duforest and another Auchan colleague, decided to go into business for himself. The partners decided to enter the clothing retailing business, targeting the women's ready-to-wear market. From the start, the new company identified itself clearly as a retailing business—rather than as a fashion house—targeting the development of an extended network of stores. Instead of seeking to create its own fashion, the company instead sought to provide low-priced variations of current seasonal trends, with an emphasis on a range of colors in order to stimulate high-volume sales. The company chose the name Camaïeu, playing off its retailing strategy.

Camaïeu opened its first store in Roubais in 1984, which was soon followed by several others as Torck and partners fine-tuned its product offering. By 1987, the network had expanded to a chain of 17 stores, including the first franchised store. By then, too, the company had completed the development of its retail concept and prepared to begin a full-fledged expansion of the chain.

The strong cash flow generated by the retail network became the financial motor for Camaïeu's first growth phase as the company began opening new stores at a brisk pace. By 1991, the company's network had topped 100 stores, and Camaïeu had established a fully national presence. Although many of the stores remained owned directly by Camaïeu, franchising had enabled the company to double its growth, and into the mid-1990s, the number of franchised stores increased to represent more than half of the group's total.

Camaïeu next turned to diversifying its retail offering. In 1991, the company created a second retail format, Camaïeu Homme, meant to replicate the company's success in the men's clothing sector. The effort proved successful, and the company began rolling out a number of Camaïeu Homme stores in the early 1990s. Nonetheless, the group's women's clothing network remained its flagship.

The group's success at home encouraged it to turn its attention toward developing an international presence. The company opened its first foreign Camaïeu in 1991, and by 1993, Camaïeu stores had been opened in Belgium, The Netherlands, Spain, Switzerland, and Luxembourg. By 1994, there were 20 foreign stores in operation.

In the meantime, Camaïeu's domestic network had taken off, topping 200 stores in 1993. That year marked a dramatic acceleration of the group's expansion, with 59 women's stores opened in just one year. The company kept up this pace in 1994, adding more than 70 stores that year. This expansion also included the company's first acquisition, with the purchase of the 50-store Tandy clothing chain.

With its total network nearing 300 stores, Camaïeu decided to add a third clothing store format to complete its offering. In 1994, the company debuted its Camaïeu Enfant store format with clothing targeting the children's market. That format also proved a success with price-conscious French consumers. As before, the company continued to finance its expansion through the steady cash flow generated by its growing chain. In this way, the company was able to absorb the start-up losses of new stores and its new clothing store formats.

Rebuilding in the New Century

With three retail formats to develop, Camaïeu committed itself to a still more aggressive expansion strategy as it turned toward the mid-decade. Yet a sudden drop-off in consumer spending in 1994 and 1995 caught the company short; with its cash supplies dwindling, Camaïeu was forced to borrow in order to finance its expansion strategy.

Yet the downturn in the French retail sector continued through 1995. By the end of the year, the group's creditors were demanding to be repaid, and Camaïeu found itself on the edge of bankruptcy. Under pressure from its creditors, Camaïeu was forced to split its operations into three separate enterprises, selling off the Camaïeu Homme and Camaïeu Enfant chains as separate businesses. Cofounder Duforest led a buyout of the latter chain, which was rebranded as Okaidi in 2000 and later grew into one of the country's leading children's clothing chains.

Torck remained with Camaïeu, now reduced to its women's wear stores. Yet in order to lead the company's refocusing, Torck called on Jean-François Duprez, a former Auchan colleague. Duprez, who had spent most of his career at Auchan, set to work restructuring the company. One of Duprez's first actions was to shut down the group's international operations, refocusing the company's efforts on its French women's clothing stores. The company also shut down four unprofitable stores in France. In addition, in an effort to solidify its balance sheet, the group brought in a number of outside investors.

Into the mid-1990s, most of the items in Camaïeu stores had been made in France. Under the company's restructuring, however, Camaïeu began turning to lower wage markets in India, North Africa, Turkey, and China, drastically reducing its purchasing costs. Meanwhile, back at home the company launched a complete refurbishment of its company-owned stores; by 1999, this process had, in large part, been completed. Concurrent with the store makeover, Camaïeu also moved to take control over its network, beginning a program of buying out its franchise-holders. By the end of the decade, the company had reduced the proportion of franchise stores to just 25 percent of the group's total. This process continued into the early years of the new decade as the number of franchised shops in France fell to less than 30.

Company Perspectives:

Allowing the greatest number of women to express their femininity, making them more beautiful, this is the desire of Camaïeu.

Camaïeu has become one of the French woman's favourite brands by providing modern, attractive and affordable collections. You will find you receive a simple, warm welcome in all Camaïeu boutiques. This is what makes our success in France and Internationally.

Key Dates:

Jean-Pierre Torck and Jean Duforest found Camaïeu as a retail women's clothing network.
The company launches aggressive expansion, topping 100 stores by 1991.
The company launches international expansion, with its first foreign stores in Belgium, Spain, Switzerland, and The Netherlands; Camaïeu Homme, a men's clothing retail format, is launched.
The company opens its 200th store in France.
The company acquires 50 Tandy retail stores; Camaïeu Enfant, a children's clothing format, is launched.
A downturn in the retail sector forces the company to sell off Camaïeu Enfant and Camaïeu Homme; Jean-François Duprez is named as company CEO to lead its restructuring; Camaïeu shuts down its foreign operations.
A storewide refitting is launched, and the company begins buying up many of its franchised stores.
Camaïeu goes public on the Euronext Paris Stock Exchange; the company returns to the international market with its first stores in Spain and Poland.
The company opens stores in Italy and the Czech Republic.
The company opens its first stores in Belgium.
Camaïeu enters Russia with the opening of its first three stores there.
AXA Private Equity acquires majority control of Camaïeu and launches a full takeover offer.

Duprez's efforts paid off, and by the end of the 1990s, Camaïeu was growing again, in a more controlled expansion that nonetheless allowed the company to top 300 stores by the end of 1999. The following year, Camaïeu also relaunched its international effort, opening its first new foreign stores in Spain and in Poland. Also in 2000, Camaïeu went public, in part to enable its financial backers to cash out on their investment. Torck, who continued as company chairman, maintained a significant stake in the company, with 37 percent of shares and 52 percent of voting rights.

The public offering allowed Camaïeu to continue its expansion into the new decade. The company maintained a slow but steady string of store openings in France, and by 2005 the company's total domestic network included 373 stores. At the same time, the company began targeting new foreign markets, opening stores in Italy and the Czech Republic in 2002 and Belgium in 2003, and then opening its first three in Russia in 2004. By the beginning of 2005, the company operated 49 international stores altogether. The company's total number of stores now topped 420. The company's sales also were rising strongly, topping EUR 393 million in 2004.

Camaïeu's return to health was all the more remarkable given the difficulties faced by most of its competitors in the shrinking retail climate of the first half of the 2000s. Buoyed by the success of its retail concept, Camaïeu made plans to shift its expansion strategy to a higher gear, announcing plans to open some 30 to 40 new stores per year in France as well as internationally, with a focus on southern Europe, into the next half of the decade. Meanwhile, the company found itself with a new majority shareholder when Torck and family announced their decision to sell their holding in the company to investment group AXA Private Equity in January 2005. That company then announced its intention to take full control of Camaïeu—a move that failed, however, as Camaïeu's share price began to rise toward the middle of the year. In the meantime, both Duprez and Torck remained at the helm, guiding Camaïeu toward new successes in the future.

Principal Competitors

Hennes & Mauritz AB; Benetton Group S.p.A.; Vivarte; Gruppo Coin S.p.A.; Kiabi S.A.; NafNaf S.A.; Pimkie S.A.; Promod S.A.

Further Reading

Allienne, Phillippe, "Camaïeu, société de prêt-à-porter, passe sous le contrôle d'un fonds d'investissement," Le Monde, January 18, 2005.

"Camaïeu, entreprise citoyenne," Nouvel Observateur, April 28, 1994.

Ducourtieux, Cécile, "L'OPA d'Axa Private Equity sur Camaïeu pourrait se solder par un échec," Le Monde, April 8, 2005.

Mérieux, Alice, "Camaïeu redonne le ton," Challenges, September 11, 2003.

——, "Le rachat de Camaïeu, c'est celui d'une équipe qui gagne," Challenges, January 20, 2005.

Rousseau, Anna, "Jean-François Duprez," Challenges, November 18, 2004.

—M. L. Cohen

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