Groupe Lapeyre S.A. History

Address:

2, rue Andre Karman
93300 Aubervilliers
France

Telephone: (+33) 1 48 11 74 00
Fax: (+33) 1 43 52 64 46

Public Subsidiary of Poliet S.A.
Incorporated: 1931 as SARL Lapeyre & ses Fils
Employees: 400
Sales: FFr 6.46 billion ($1.07 billion) (1998)
Stock Exchanges: Paris
Ticker Symbol: LAPGF
NAIC: 44411 Home Stores; 42139 Other Construction Material Wholesalers

Company Perspectives:

International development is imperative and we are striving to achieve that goal. Although the Lapeyre Group ranked Number 1 in its sector in Europe, we were only strongly established in France. Now our objective is to adapt our retail networks in Spain, Belgium and Switzerland, and to federate the joinery product companies acquired in Germany and Poland, while leveraging shared expertise and skills. We are constantly looking for opportunities to develop marketing structures for retailing and for providing services to end users, while taking into account different situations and cultural diversity. In conclusion, Lapeyre Group has strong potential for growth in France and, thanks to its expanded scope, new prospects for business in other European countries. These factors will underpin sustained, profitable growth in future years.

Company History:

Groupe Lapeyre S.A. is a leading European manufacturer and retailer of doors, windows, and other joinery products to the DIY consumer market and professional craftsman and construction industries. Since the late 1990s, Lapeyre also has added a service component, offering sales help and installation of products, as well as kitchens, staircases, and other products manufactured by its network of subsidiaries. Lapeyre's business has focused traditionally on its home French market, where it operates a nationwide chain of more than 75 Lapeyre warehouse stores, as well as a growing number of catalog-based sales outlets. Lapeyre-brand retail sales account for more than half of the company's FFr 6.5 billion in annual sales. The company also operates the GME-brand chain of bathroom and tile specialty warehouse stores. There are more than 50 GME stores, which generally operate alongside Lapeyre warehouse stores. In addition to offering services through the Lapeyre and GME retail chains, Lapeyre launched the K par K chain, targeting the consumer replacement window market. Featuring case-by-case consultation, sales, and installation services, the K par K chain, launched in the mid-1990s, has grown to a nationwide network of nearly 125 stores and sales agencies. On the manufacturing side, Lapeyre operates 12 plants in France, six plants in Germany, three facilities in Poland, and one in Belgium. In addition to supplying the Lapeyre and GME stores, the company also markets to the professional building materials supply and construction markets under the OXXO and Les Zelles brand names. While continuing its expansion in France, Lapeyre has targeted European expansion for its continued growth, especially the German, Belgium, Swiss, and Spanish markets. Listed on the Paris Stock Exchange since 1992, Lapeyre has been a subsidiary of Poliet (itself a subsidiary of the French industrial giant Compagnie de Saint Gobain) since the mid-1970s.

Building a Demolition Business in the 19th Century

Groupe Lapeyre takes its name from its founding family. Natives of the Auvergne region, where the family was involved in the scrap iron business, the Lapeyres followed their fortunes to Paris. Family patriarch Pierre Lapeyre arrived in Paris in the 1850s, recuperating and reselling scrap iron. The demolition of a factory in Nevers gave Pierre Lapeyre the opportunity he needed. Lapeyre negotiated the contract for the factory's scrap metals, which he then sold in Paris for a profit. From there Lapeyre became one of the capital city's leading demolition and recuperation specialists at a time when, under the leadership of Napoleon III and Baron Haussmann, Paris was undergoing the transformation that brought the city into the modern era. Haussmann's plans called for the demolition of entire neighborhoods within the city. With Haussmann's backing, Lapeyre won more and more of these demolition contracts.

In the 1880s, Pierre Lapeyre's nephew, Jean-Baptiste, then aged 13, came to Paris and joined his uncle's business. By the age of 22, Jean-Baptiste had taken a leading role in the business, leading it into new areas, such as the recuperation and sale of marble, and from there to stone and marble chimneys. By the turn of the century, Lapeyre also had begun manufacturing iron gates. Lapeyre's oldest son, Martial Lapeyre, joined his father's business in 1926, at the age of 22. With an engineering degree from the Ecole de Travaux Publics in Paris, Martial Lapeyre became the architect of the Lapeyre company's modern success.

Martial Lapeyre was given the leadership of the family business in 1931, when the company formally adopted the name of Lapeyre et ses Fils. Much of the company's business involved the sale of antique doorways, gates, chimneys, and other joinery items recovered from demolition sites. Recognizing the strong demand for these antique styles, Martial Lapeyre turned the company to manufacturing new joinery products based on these antique designs. Lapeyre's products quickly found a strong market among Parisian craftsmen and consumers, who were happy to have the choice of these newly manufactured products to match the styles and dimensions of their homes. In this way, Lapeyre helped initiate the modern French home improvement and renovation market. One factor in the company's success was Lapeyre's decision to print up catalogs detailing his products. The first catalog was produced in 1932 and distributed free to customers. In 1931, the company had posted annual sales of 800,000 francs; by the end of that decade, the company's sales had grown to more than three million francs.

The Second World War and the German occupation put a temporary halt to Lapeyre's business. With the Liberation in 1945, however, Martial Lapeyre, who had returned to the Auvergne to avoid being drafted into the German forced labor program, returned to Paris and restarted the Lapeyre company's operations. The need to rebuild much of northern France and the resulting economic boom years saw Lapeyre become one of the Paris region's primary suppliers to the home improvement and renovation markets.

Building a National Network in the 1970s

In 1949 Lapeyre changed its corporate status and took on the name of Lapeyre et Cie. Martial Lapeyre also brought the company into the retail sphere. By then Lapeyre not only manufactured its own products, but also had begun contracting products from a growing network of manufacturers. Lapeyre opened the first of its 'depots' on the rue de l'Abbé Groult in Paris's 15th arrondissement and operated as a cash and carry business, a novel feature at the time. Craftsmen and consumers were able to come to the depot, make their purchases, and leave with the products from the depot's stock without delay. As manufacturer of many of its products, Lapeyre was able in this way to save on distribution costs. The company passed these savings on to its customers, in the form of highly competitive prices. These, in turn, were nonnegotiable, another new concept for the time.

More of a marketplace than a retail store, the first Lapeyre depot marked a grand success for the company. By the end of the 1950s, the company had grown to some 30 employees--still led by Martial Lapeyre--and had begun to take on the structure of a mature business, adding purchasing and marketing departments. In 1960 the company also began to expand, opening a second, larger depot store in Aubervilles, just outside of Paris. Lapeyre was expanding its manufacturing operations as well, buying up those of the Société Anonyme des Menuiseries du Centre, while also negotiating an exclusive contract with longtime supplier and friend Marcel Pasturel. Although Lapeyre continued to expand its own manufacturing capacity, such partnerships were essential to its growth during the 1960s, as Lapeyre expanded its product lines and materials offerings through contracts with such partners as Etablissements Roy and Etablissements Poreaux, both of which became exclusive suppliers to Lapeyre in the 1960s. In turn, Lapeyre invested heavily in its partners' operations, providing funds, materials, and facilities to expand production capacity. In many cases, Lapeyre's partners became Lapeyre subsidiaries, as was the case with Pasturel and Poreaux in the late 1970s.

At the same time that it expanded its retail distribution and manufacturing capacity, Lapeyre also began a mail order service. As customers in the French provinces sought the company's highly competitive prices, the company's mail order services were first operated informally out of its Abbé-Groult depot. By the late 1960s, the company decided to decentralize the mail order business, opening a facility in Châteauroux, in central France, marking the company's first foray beyond the Paris region.

Dubbed Lapeyre Correspondance, the service quickly revealed itself not only as expensive, but also as unable to match the growing demand. Lapeyre soon looked instead toward building a network of retail depots modeled on its original Parisian locations. Rather than operate its own stores, however, Lapeyre adopted an approach similar to a franchise concept. In 1967, the first two provincial Lapeyre depots opened, in Gamaches in the north and in Nimes in the south. Lapeyre owned the actual buildings and provided the store stock and signage, but the actual operation of each store was placed entirely in the hands of its manager, who was paid on commission. In this way, the Lapeyre depots functioned as independent businesses, yet joined together as a centralized network. By the mid-1970s, the company had added nine provincial Lapeyre depots. The company's operations included five factories and produced sales of FFr 115 million per year.

International Growth in the 1990s

In 1975, Martial Lapeyre, aged 71 years with no children, sold Lapeyre to French construction materials market leader Poliet. The sale, of 80 percent of Lapeyre for FFr 55 million, helped to secure Lapeyre's future and also complemented Poliet's own product range, which in large part had ignored the joinery sector. Martial Lapeyre turned over direction of the company he had built, yet remained actively involved in its operations until his death in 1984.

1904:Birth of Martial Lapeyre.

1931:Formation of SARL Lapeyre & ses Fils.

1932:First Lapeyre catalog produced.

1942:Cessation of operations during German occupation.

1945:Production and sales restarted.

1949:Incorporated as Lapeyre et Cie. S.A.; first 'depot' store opened in Paris.

1960:Second Paris store opened.

1967:Opening of first two stores outside of Paris.

1975:Acquisition by Poliet S.A.

1989:Opening of Barcelona store; launch of K par K subsidiary.

1991:Opening of stores in Switzerland and Italy.

1992:Public offering on Paris Stock Exchange.

1993:Restructuring of international operations.

1996:Exit from Italian market.

Under Poliet, Lapeyre greatly expanded its production capacity, buying up many of its longtime suppliers, while investing heavily in modernizing its facilities. In addition to adding computer-aided design and computer-aided manufacturing capabilities, Lapeyre adopted modern inventory and purchasing techniques, while streamlining its manufacturing. Meanwhile, the company's provincial expansion continued, with the number of depots growing to 18 by 1983. Beginning in 1984, however, the company determined to step up its expansion, devoting some two-thirds of its investments to new store openings. Seven more retail stores were added in that year. By then, also, the company had made its first international expansion, opening a store in Lieges, Belgium.

During the 1980s, Lapeyre, which continued to produce and distribute its ever-growing catalog, also began to invest in advertising for the first time. In addition to a print campaign, the company, as a manufacturer as well as retailer, was able to launch a successful television advertising campaign (French legislation barred retailers from television advertising). At the same time, Lapeyre expanded its retail operations, acquiring French retail bathroom and tiling specialist GME in 1982. With this purchase, the company's new store openings took on an expanded concept, featuring a GME retail center side by side with a Lapeyre store. By the mid-1990s, the company operations included more than 30 such double-signage locations.

The GME purchase marked the first of a number of acquisitions that transformed Lapeyre into Groupe Lapeyre. In 1987 Lapeyre added construction materials and PVC distribution specialists GIMM and SAFERM, later reformed as OXXO and Les Zelles. The addition of these two companies gave Lapeyre the lead in the French PVC-based joinery products manufacturing market. In that same year, Lapeyre also began to diversify into the services sector, with the opening of its first K par K ('case by case') replacement window center.

The Liege store remained the company's sole foray into the international market for most of the 1980s. In 1989 the company began to extend deeper into Belgium, opening stores in Brussels and in Antwerp. At the same time, the company determined to move into the Spanish market, in particular to take advantage of the coming Olympic Games in Barcelona in 1992. After opening in that city, the company added four more Spanish stores, enjoying success--up until the end of the Olympics, at which time the company's Spanish sales all but collapsed. Meanwhile, Lapeyre was having difficulties in Switzerland and Italy as well, where it had opened new stores in the beginning of the 1990s. Then Lapeyre's Belgian operations also failed to provide the desired success.

Lapeyre, which went public in 1992, yet remained more than 72 percent owned by Poliet, was forced to reconsider its international operations. The company quickly came to the conclusion that its attempt to reproduce its French success formula did not take into account the cultural particularities of its neighbor markets, and efforts were made to revamp its product lines and relaunch its international growth. Taking the decision to exit the Italian market, Lapeyre remained committed to the Spanish, Belgian, and Swiss markets. By the mid-1990s, the company's international operations were posting growth once again in both sales and profits.

The company's French market, however, remained its primary source of sales. For the beginning of the new century, Lapeyre began developing a third prong to its French business, adding a services component, including installation and other services. In the late 1990s, however, Lapeyre began to target international expansion for its future growth. The company began to make acquisitions of manufacturing operations, notably in Germany, where it acquired six wood and PVC factories in 1998, and in Poland, where it acquired that country's leading PVC window manufacturer Erg-Okfens, in January 1999. These acquisitions, as well as that of Sofiplas of Belgium, were expected to help the company boost its international sales from just 14 percent of total sales--which topped FFr 8 billion for the 1999 year&mdashø more than 30 percent of sales in the early years of the 21st century.

Principal Subsidiaries: Lapeyre; GME; K par K; O'Carré; SGM; GIMM; OXXO; Les Zelles; Lapeyre International; Reckendrees (Germany); Bernsdorfer Bauelemente (Germany); Becher (Germany); Dahm (Germany); Kühn (Germany); Erg-Profil Ltd. (Poland); Okfens sp. Z.o.o (Poland); Sofiplas (Belgium).

Principal Competitors: Berisford International plc; Boral Ltd.; Royal Group Technologies; Groupe Castorama-Dubois Investissements; Mr. Bricolage.

Groupe Lapeyre S.A. History

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