Eram SA History

Company Perspectives:

"A company ... must keep in mind that it has never reached the top and that it can never be allowed to contemplate its own success. Its achievements are always being called into question. Stimulated by this risk, its directors and staff have to find among themselves the experience, the enthusiasm, and the energy which will ensure its future by continuing to respond profitably to the needs of the market." --Gérard Biotteau, chairman

Key Dates:

1927:

A shoe manufacturing company is founded by Albert-René Biotteau-Guery.

1942:

Eram opens its first retail store in Paris under the Eram name.

1958:

The company opens sales subsidiaries in Belgium and Germany.

1961:

Eram opens its first foreign retail store in Belgium.

1969:

The company opens its first retail store in Germany and begins development of a franchise network.

1974:

Production facilities in Portugal, and the following year in Spain, begin operation.

1977:

Eram acquires upscale Bocage shoe brand, introduces Mi-Temps sportswear brand, acquires TBS sports shoes brand, and launches Interco import subsidiary.

1987:

The company launches L'Hyper aux Chaussures and L'Hyper aux Vetements, deep-discount shoe and clothing retail stores.

1991:

Gemo, a chain of mid-priced stores featuring both shoes and clothing, is launched.

1995:

The company acquires Heyraud, an upscale retail shoe chain.

2002:

Eram acquires children shoe store retail chain NA!

Company History:

Eram SA is the leading manufacturer of shoes in France, producing more than 11 million pairs of shoes per year. The company operates ten manufacturing facilities, including nine in its Vendée region home base; the remaining plant is located in Portugal. The company's shoe production ranges from discount shoe styles to high-end (just below luxury) fashions under brand names that include Bocage (high-end fashion), Anne Flavie (fashion comfort), TBS (sports and leisure), Buggy (children and juniors) and Parade (safety, including hiking). Yet shoe production accounted for just EUR 200 million of the company's EUR 1.28 billion in sales in 2001. The largest part of the company's revenues are generated through its internationally operating portfolio of retail distribution networks. In total, the company owns and operates 1,300 stores and supports an additional 240 franchise stores in France, Belgium, Luxembourg, and Germany. The company's flagship retail chain is its Eram stores, with more than 650 stores selling youth-oriented shoe fashions in a downtown store format. Other chains operated by Eram include Bocage, Franc Arno (157 stores), Taneo (153 stores), Heyraud (50 stores), and Divergence (38 stores). While these stores are typically found in city center locations, Eram has also implanted itself in the ex-urban shopping center circuit with the deep-discount retail format L'Hyper aux Chaussures and with 260 Gemo stores, a low-to-mid-range format that also includes clothing fashions. Sales of more than 38 million pairs of shoes per year generated revenues of more than EUR 720 million in 2001, while clothing sales, of nearly 32 million garment pieces, raised revenues of EUR 360 million. Eram is led by Xavier Biotteau, president, and Luc Biotteau, vice-president, both of whom are grandsons of the company's founder. The Biotteau family, including longtime Chairman Gérard Biotteau, continues to own the private company.

Shoemaker's Apprentice in the 1920s

Albert-René Biotteau-Guery began his professional life at the age of 13 as a shoemaker's apprentice. In the 1920s, Biotteau became determined to go into business on his own. In 1927, he founded a workshop in Saint Pierre Montlimart, near Angers, in France's Vendée region. That business was to flourish, becoming not only the region's largest single employer but also the nation's leading shoe manufacturer.

Biotteau's shop grew quickly and by the beginning of the 1930s had reached production levels of more than 600 pairs of shoes per day. Throughout the decade, Biotteau continued to build up his company, adding two new production plants in the area surrounding Saint Pierre Montlimart, where the company remained centered into the next century. By the mid-1930s, production had risen to more than 2,400 pairs of shoes per day.

It was around that time that Biotteau developed a new name for the company--and a new brand name for the company's shoes. Taking the first two letters from his second name, René, and the first two letters from his wife's name, Marie, Biotteau formed the anagram "Eram."

Development of the new brand name was temporarily put on hold at the end of the 1930s with the outbreak of World War II. By 1942, however, Eram was once again in production. In that year, the company made a strategic move that was to form the backbone of its future success--the opening of its first retail stores. For this, the company purchased a store in Paris, giving it the Eram name. The company quickly added more stores in the Paris area before expanding throughout France.

Eram's development continued into the 1950s. The company also became noted for its technological development and included among its patents a method for producing shoes featuring injection-molded plastic soles in 1955. By the end of that decade, Eram had also begun its first expansion beyond France, creating sales subsidiaries in Belgium and Germany in 1958. The company soon added retail sales to its growing international operations, opening its first foreign retail store in Belgium in 1961.

Supporting Eram's growth was the addition of new manufacturing plants--by the beginning of the 1970s, the company operated nine production plants, all located in communities near its Saint Pierre Montlimart headquarters. By then, the company had opened its first store in Germany. Eram had also begun to put into place a franchise network through the establishment of Club Eram, launched in 1969. The company's franchise network was later to grow to more than 400 stores, with Eram owning the majority of them.

Expanding Brands in the 1970s

Gérard Biotteau, son of the company's founder, took over as CEO and chairman in 1970. Throughout his nearly 30 years at the head of the company, the younger Biotteau remained true to his father's vision, especially the company's insistence on developing its own distribution network, a strategy that in part served as a means for maintaining the viability of its manufacturing operations. The company by then found itself faced with a new breed of competitor--the hypermarket, a fast-rising store format combining supermarket and department store offerings, including shoe departments. Eram long remained hostile to what became known as the "large-scale" distribution channel in France, which threatened to dominate the French retail scene. In part to counter the threat presented by the country's growing number of hypermarkets, Eram launched its first national advertising campaign in 1970.

Eram's industrial park grew during the 1970s to include a new facility for the production of polyurethane-based soles. In 1974, the company opened a production plant in Portugal, its first such venture outside of France, and the following year extended its manufacturing operations with the opening of a plant in Spain.

In the late 1970s, the company began expanding its catalogue of shoe brands. Erman acquired the high-end women's fashion brand Bocage in 1977 and introduced its first winter collection under that label. That same year, Eram launched a new brand name, Mi-Temps, featuring sports-and leisure-oriented shoes, clothing, and accessories. The company then purchased the brand TBS and began production of synthetic soles specifically for the sports shoe market. This purchase led the company to launch its own line of sports shoes under the TBS brand name.

Eram continued to add new brands through the end of the 1970s, including Parade, a line of safety shoes and boots, launched in 1978, and Buggy, featuring sportswear shoe designs, launched in 1979. These brands helped extend Eram's line of footwear across most of the major shoe and boot categories. The company also began importing shoes, creating a dedicated subsidiary, Interco, in order to complete its retail footwear offering.

New Retail Formats in the 1980s

By the beginning of the 1980s, more than 600 Eram stores had been opened. The company next turned its attention to developing other retail store formats. An early move in this direction came with the development of the Mi-Temps brand into a separate retail concept dedicated to sportswear, with the first Mi-Temps stores opening in 1982. The following year, Eram began developing a new retail concept for the German market as well. Meanwhile, the company continued to expand its Eram network, notably with the launch of a franchise network in Belgium in 1982. Investment in manufacturing operations also continued, most prominently with the development of automated, laser-based leather cutting equipment. Eram also began automating other parts of its industrial operation, beginning with its leather-punching workshops in 1981.

Eram added other new retail formats during the 1980s. In 1986, the company launched the Divergence chain of shoe stores, which was to grow to nearly 40 stores by the end of the 1990s. The arrival of the deep-discount trend, imported from Germany, and itself a reaction to the growing strength of the hypermarket distribution channel, encouraged Eram to develop its own deep-discount formula in the mid-1980s. Until then, the company had focused primarily on the urban and downtown markets, developing its stores under a city center format. In 1987, however, the company launched a new store format, L'Hyper aux Chaussures. The new stores were located in the growing number of ex-urban shopping centers springing up throughout France during the 1980s and featured shoes at discount prices. At the same time, Eram ventured into new territory, that of clothing and textile sales, launching a companion store format, L'Hyper aux Vetements that same year.

The success of the Hyper format led the company to combine shoes and clothing into a new store format at the beginning of the new decade. Launched in 1991, the Gemo network, which adopted the same ex-urban location policy as the Hyper stores, targeted the mid-priced market, offering shoes and clothing for men, women, teenagers, and children. With the French economy in turmoil at the beginning of the decade, the Gemo format became a strong success for Eram and grew into the company's second-largest retail chain, trailing only the company's flagship Eram chain. The Gemo network was boosted in 1993 with the purchase of the Tenir retail group, giving Eram that company's existing portfolio of ex-urban shopping center-based locations.

Meanwhile, Eram had continued to add to its brand portfolio through acquisitions. An important move came in 1989 with the purchase of the France Arno retail group. That acquisition strengthened the company's position in France's downtown shopping districts. By the beginning of the new century, the company featured nearly 160 France Arno stores.

European Shoe Leader in the 21st Century

By the early 1990s, Eram was posting nearly FFr 3.7 billion in sales (approximately EUR 560 million), including some 23 percent in foreign sales. By then, its retail empire had become its strongest revenue generator, with more than 780 company-owned stores and some 450 franchised stores. In 1993, the company undertook a vast upgrade of its retail network, spending some FFr 33 million to refit nearly all of its stores in France and abroad.

Into the mid-1990s, Eram continued to expand its retail holdings, launching a new mid-range clothing and shoe format, Tandem, in 1995. The following year, the company developed another shoe format, dubbed Taneo, as a bridge format between its downtown and ex-urban store formats. Meanwhile, Eram had extended its portfolio with the acquisition of the Heyraud retail chain in 1996. That chain had grown to 47 stores by the mid-1990s, with sales of more than FFr 190 million, complementing the company's existing operations with its focus on upscale shoe fashions for men and women.

Eram's industrial park had grown to 13 plants by the mid-1990s. By the turn of the century, however, the company had eliminated four locations, including its facility in Spain. The prevailing trend in both the shoe and clothing industries had long been that of moving production to lower-cost facilities in Asia and other regions. Nonetheless, Eram maintained its commitment to manufacturing in Europe, and particularly in France, noting that its proximity to the market enabled it to react more quickly to changes in fashions. Such reactivity enabled the company to continue to build on its leading position in France.

Gérard Biotteau turned over leadership of the company to his sons, Xavier and Luc, as the company entered the new century under a third generation of family leadership. The company's new president and vice-president moved to take on the hypermarket sector by acquiring the wholesale company Dresco in 1999, adding that company's expertise in distributing to the country's powerful hypermarket groups.

By 2001, Eram had boosted its sales to EUR 1.28 billion. Its store network, which expanded into Luxembourg, Belgium, and Germany, helped it claim a position as one of the leading European shoe producers and retailers. The company had also begun trimming back its franchise operations, boosting the number of company-owned stores to more than 1,200, while cutting back its franchise network to just 240 stores. Yet Eram showed no sign of resting on its laurels--in 2002, the company acquired yet another retail store format, the ten-store NA! chain of children's shoe specialists.

Principal Subsidiaries: Interco; Desco.

Principal Competitors: Continental AG; Nike Inc.; Orkla ASA; adidas-Salomon AG; Foot Locker Inc.: Freudenberg und Co.; Reebok International Ltd.; Ansell Ltd.; Brown Shoe Company Inc.; Phillips-Van Heusen Corp.; C and J Clark Ltd.; Vasque Outdoor Footwear Div.; Timberland Co.; New Balance Athletic Shoe Inc.; Salamander AG; Skechers U.S.A. Inc.; C and J Clark International Ltd.; Acushnet Co.; Columbia Sportswear Co.; Genesco Inc.; Wolverine World Wide Inc.

Further Reading:

• "En rachetant Heyraud, Eram veut maîtriser ses circuits de distribution," Les Echos, January 15, 1996 p. 17.
• "Eram: A Shoe Champion's Reinvigorating Lessons," Anjou Economique, November 29, 1999.
• "Eram relooke ses boutiques en Europe," Les Echos, September 14, 1993, p. 20.
• "Le PDG d'Eram passe la main à ses deux fils," Les Echos, February 2, 1998, p. 36.

Source: International Directory of Company Histories, Vol. 51. St. James Press, 2003.