Olivier Meier is a professor at Paris Dauphine universities, director of the Asap Observatory, author of the best-seller “Mergers and acquisitions” published by Dunod, and won the prize for best international article in the Familly Business Review magazine, for his work. on business transfer and takeover
Oliver Meier
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Faced with the difficulties encountered by Gifi, Philippe Ginestet had no other choice than to put his business, which has a turnover of 1.3 billion, up for sale. Since then, letters of intent for the takeover have been sent. Six offers would be on the table.
Who are the potential candidates for the acquisition of Gifi in your opinion?
The name of Moez-Alexandre Zouari has already been mentioned. The boss of Maxi Bazar and Stockomani has experience in turning around businesses in difficulty. The objective of reviving Gifi seems realistic with possibilities for synergy, synonymous with economies of scale which would make it possible to turn the brand around fairly quickly. Finally, from a strategic point of view, the acquisition of Gifi would allow it to consolidate its position in the discount sector.
The Carrefour group, whose name is mentioned, could also be interested, but for other reasons. The idea for Carrefour to develop its non-food offering and the discount section would allow Gifi to strengthen its low-price offering.
The Casino group, for its part, which has always had a, let's say average, positioning on price, could thanks to Gifi improve its competitiveness in this area and regain momentum in its commercial dynamic, which has deteriorated in recent years. years.
The Action brand, to accelerate its expansion and also consolidate its position in the sector, is one of the potential candidates, as is the British group B & M, also specialized in the mass distribution of discount products, for the same reasons.
Finally, and we haven't talked about it until now, brands like Amazon or Temu, powerful digital players, could see in Gifi the opportunity to establish themselves physically in France.
A Gifi competitor winning the bid would necessarily be bad news for employment, right?
It appears that Philippe Ginestet's management was marked by the seal of benevolence and paternalism, with a strong local anchoring dimension. A takeover by a competitor would be marked by very significant restructuring, with store closures, and unfortunately an impact on employment. Gifi played this very traditional game in the noble sense of the term, where the human aspect, without being a Care Bears company, with very strong local roots – as evidenced by the location of the headquarters in Villeneuve-sur-Lot – is one of the fundamentals. We feel here the touch of the boss, who does not respond to purely strategic and financial considerations. We might think that this is not the priority of a buyer, especially if it is a business structure which has other ambitions.
Sale of Gifi: 40 years of saga, look back at Philippe Ginestet's empire
IN RETRO – The boss of Gifi opened his first discount store in Lot-et-Garonne on September 18, 1981. The Villenevois who had since made his company the number 1 discounter in France should sell his brand, in financial difficulty. The end of four decades of extraordinary success?
Is the fact that Philippe Ginestet only sells the brand without the real estate an obstacle to a buyout?
This is clearly a problem, especially for candidates who are his competitors. Taking over a brand is already a significant legal and financial complexity. Adding this dimension which does not fit into the logic of acquiring strategic assets is an additional difficulty. Not including real estate in this type of process is often a sticking point.
What makes the price of a brand of this size?
That's a real question. Traditionally, it would be calculated on turnover, customer loyalty and real estate assets. For Gifi, this poses a problem. It is a very well-known and traditional brand but which does not appear to be characterized by modernity. This is a first debate. Second debate: taking over a company in full swing is one thing, taking over a company in difficulty is another. However, in this case, the real estate assets are a guarantee for the buyer which, in his eyes, is objectively a sure value.
The question that the potential buyer will ask is: what will remain of the commercial dynamic after the buyout if it is not already flamboyant?
In this process, are we not facing a game of lying poker, where potential takeover candidates seek to weaken Gifi's position?
The troubled game finds its origins in the personality of the CEO of Gifi. We are in a different situation from that of a boss who would like to retire. It's already complicated because there is an attachment to the society we have created. But a CEO who has such strong ties with his colleagues, I can't see him not not fighting for them. However, these are emotional considerations which do not come into play for an operator whose economic and financial indicators are the compass. The interests are not of the same nature as in a classic transferor/purchaser scheme. Philippe Ginestet is “I give in but I still stay here”. The negotiation promises to be all the more complex as the seller has financial, human and emotional interests.
