An unusual agreement

The official announcement on 5 November still caused astonishment, even though rumours had been doing the rounds of the French market for several weeks beforehand. It is not easy to follow the logic of this alliance between a cooperative organisation and a multiple chain. Nevertheless, the Leroy Merlin group has, via Leroy Merlin Participations, acquired 50 per cent of the shares of Sapec, the cooperative that produced Domaxel. The acquisition is still subject to approval by the relevant competition authority. The figure involved in the purchase has not been revealed. The other half of the Domaxel capital still remains in the hands of the members of the cooperative; Leroy Merlin is actually taking on the share that the former investor Eric Bolloré (MBSA) had held since 1995.Christian Giro, chairman of the Domaxel supervisory board, acknowledges that it is “an untypical agreement, but one that will make dynamic expansion possible. Today, having chosen a partner from the same field, we can establish a genuine partnership, from which the chain will benefit, and build up a stable organisation that is based on human values, without being exposed to external financial hazards or activities on the stock market. Domaxel has entered into an alliance in order to strengthen its position as a medium-sized neighbourhood supply specialist.”Yvon Jolivet (left), acting managing director of the Leroy Merlin group, and Christian Giro, chairman of Domaxel’s supervisory board.This alliance is something quite new for Leroy Merlin. “Leroy Merlin’s image is that of a group that can only go it alone. But that is quite wrong,” in the emphatic opinion of Yvon Jolivet, acting ceo of the Leroy Merlin group. Proof of this is provided by the group’s 50 per cent stake in the SIB group in Italy, which operates both Leroy Merlin stores and the Bricocenter outlets (Rinascente), a considerable number of which are run as franchised businesses. “This line of action is in correspondence with our views that are aimed towards developing a multiplicity of formats. The group has gained experience of medium-sized outlets with Bricocenter in Italy, which it has since developed further with Aki in Spain and Portugal. We want to become a major player in this segment in France as well, and the partnership with Domaxel seems to us to be an effective means of achieving this. We are convinced that the neighbourhood supplier concept has a future, most particularly in a market that is gradually approaching…