GROUPE DE LA CITÉ History

Address:

264, rue du Faubourg St-Honoré
75008
Paris
France

Telephone: (1) 42 67 40 22
Fax: (1) 42 67 29 69

Public Company
Incorporated: 1852 as Librairie Larousse
Employees: 8,000
Sales: FFr6.00 billion (US$1.18 billion)
Stock Exchange: Paris

Company History:

Groupe de la Citée, a holding company owned by Compagnie Europ&eacute-ne de Publication (CEP) and Générale Occidentale, formed in 1988 through the merger of Presses de la Cité and the Larousse-Nathan group, is among the world's ten largest book publishers. Having become France's second-largest publisher after Hachette, Groupe de la Cité is establishing itself as a leader in the areas of education and general knowledge for all age groups.

This description does not fully summarize the group's sphere of activity, however. The group's formation has produced an entity whose diversity is in some ways closer to that of a conglomerate. The publishing houses included in the group differ in prestige as in age, and their histories have only coincided since about 1980. Nevertheless, the Groupe de la Cité enjoys an economic unity which is extremely effective and which is due, in part, to its 50% shareholding in France-Loisir, a subsidiary of the group that accounts for almost half the group's worldwide sales.

Of the three groups that were merged in 1988, Larousse is the oldest. Until almost the middle of the 20th century, no distinction was made in France between publishers and those who owned bookshops. It was as such an enterprise that Librairie Larousse, was established in 1852. Pierre Larousse and Augustin Boyer, two school teachers interested in participating directly in educational reform, soon began to specialize in the publication of dictionaries and encyclopedias. Their first successful product was, however, a textbook, the Petite Grammaire Lexicologique du Premier Age, published in 1852. As early as 1863, the first installments of the Grand Dictionnaire Universel du XIXe Si&egave;cle appeared. This was the first encyclopedic dictionary to be published in France. It was more than 20,000 pages long. After the deaths of the two founders, in 1873 and 1896, the Librairie kept its name and Larousse's successors continued to carry out his business with ever-increasing success. Ten years later, Claude Augé, Pierre Larousse's successor, published the Nouveau Larousse Illustré in seven volumes, which set an example for its generation. The year 1905 saw the appearance of the Petit Larousse Illustré, which would be the Librairie's greatest success and which is still a classic; this pocket dictionary was reprinted 18 times in the 18 months which followed its publication. From then onward, Larousse's output increased and diversified. It published the Larousse Mensuel, the Nouvelles Littéraires, and a series of practical guides in fields such as travel, history, and medicine. Thirty years after the appearance of the Nouveau Larousse Illustré, it was replaced by the Larousse du XXe Si&egave;cle, published in seven volumes between 1928 and 1933, with more than 48,000 illustrations.

Meanwhile, and without being a competitor of Larousse, the 23-year-old Fernand Nathan established the Librairie Nathan in 1881. Closely followed by the educational reforms of 1881-1882 led by Jules Ferry, the Librairie reflected the new trends and published educational books with a versatile and lively approach. At the same time, Nathan developed the field of education of the very young and adapted his books to psychological insights. Among other distinctions, the publisher had the privilege of becoming the representative of educational publishers to the government. In 1919, Fernand Nathan put his son Pierre in charge of the Librairie. The latter soon dedicated himself to educational reviews and created the Brevet Elementaire, forerunner of the Nouvelle Revue Pédagogique. At the same time he concentrated on developing two areas that would later ensure the success of the publishing house: series for young children and educational games--"education through entertainment" was his motto--which occupied him until World War II.

The story of the last component of Groupe de la Cité is also the story of Sven Nielsen, a Danish bibliophile who arrived in France in 1924. He showed a keen interest in the process of distribution, first becoming a wholesaler and taking over several provincial businesses before organizing his own distribution network and founding Messageries du Livre in 1926. This diffusion and distribution organization now makes an important contribution to the success of Groupe de la Cité with its 12 branches and sales of FFr55 million.

World War II scarcely affected Sven Nielsen. He even benefited from it, acquiring Editions Albert Premier in 1942 and finally fulfilling his ambition of becoming a publisher. In 1944 he renamed the company Presses de la Cité in memory of his early days in the heart of Paris, in the shadow of Notre-Dame. He soon specialized in the publication of English bestsellers, which were received enthusiastically by a French public that had been deprived of reading matter during the war. His success, which was based on the publication of very popular works, continued to grow until 1958. From then onward, the Presses de la Cité continued to diversify, establishing new publishing houses or forming a partnership--with existing publishers Perrin in 1959, Solar in 1960, Rouge et Or in 1961, Presse Pocket in 1962, Fleuve Noir in 1963, and other, more prestigious literary publishers: Plon et Juillard in 1966 and, most notably, Christian Bourgois, which merged with Presses in 1970. The year 1970 was one of the most important dates in the history of Presses de la Cité, because the company, in partnership with the German group Bertelsmann, created France-Loisirs. Each of the partners held a 50% stake and Bertelsmann provided the management. France-Loisirs was to become the most powerful book club sales group in France and in the world. The club has more than four million members and sells 26 million books a year. While the commercial considerations of bestsellers usually prevail over the consideration of quality, and France-Loisirs takes almost no risk in its distribution methods, its overwhelming success in French publishing and in the French-speaking export market is impressive nonetheless. As early as 1982, France-Loisirs was responsible for 90% of the profits of Presses de la Cité.

World War II, which saw the birth of Presses de la Cité, was to have quite a different effect on Larousse and Nathan, whose stories now converged for the first time. The German occupation authorities set upon Nathan, eventually imposing a sales administrator on the company. In response, a solidarity movement sprang up at the heart of the industry. Andre Cillon, of Larousse, saved Editions Nathan from the Nazis, taking over and managing the company for the duration of the war. He returned the company to Fernand Nathan on the very day of the liberation of Paris. The two companies were not to renew their association before 1984, but this time it was to be permanent. Nathan, meanwhile, considerably expanded and improved his educational products, which included textbooks, practical guides, and teacher's textbooks. With the Nathan-Université series, he also entered the field of higher education. Larousse continued to operate in the field of lexicography, creating the ten-volume Grand Dictionnaire Encyclopédique between 1959 and 1969, the Petit Larousse en Couleur in 1968, and the Dictionnaire du fran&ccedils Contemporain, the definitive dictionary for the teaching of French.

From 1979, events began to lead toward the formation of today's Groupe de la Cité. In that year Editions Nathan was acquired by the Compagnie Europ&eacute-ne de Publication, a group established in 1976 to provide economic, professional, and technical information within Europe and headed by Christian Brégou. In 1983, CEP, a 35%-owned affiliate of the powerful Havas group began to show an interest in Larousse, which was in dire financial straits and faced increasing competition. Brégou took a major stake in Larousse. The Larousse Group was born, and would soon become a holding company in which Larousse and Nathan each held a stake of 50%. By 1985 Larousse seemed to be back on its feet again, thanks in particular to a new Grand Larousse and the total remodeling of the Petit Larousse.

Similarly at Presses de la Cité, Claude Nielsen, by now the head of the group, was having to recognize the critical nature of his company's situation. Presses de la Cité was not in debt or unprofitable, but the company had no large stabilizing shareholder. Almost two-thirds of the shares were in the hands of small shareholders who had no involvement with publishing. Not only was Nielsen's empire divided, but it was now becoming more and more attractive to predators. The first offensive occurred in 1986 and was led by Carlo De Benedetti, via the company La Cerus, which launched a public offer of purchase for Presses de la Cité. Threatened and anxious, Nielsen appealed to Sir James Goldsmith, owner of Générale Occidentale, a multinational which already owned several French newspapers. Goldsmith snapped up Presses de la Cité, but it was not to stay in his hands for long. Only one year later, Goldsmith sold Générale Occidentale to the Compagnie Générale d'Él&eacute¢ricité (CGE) and in the process abandoned Presses de la Cité. In the following year, Ambroise Roux, the new president and managing director of Générale Occidentale, oversaw the merger of CEP and CGE to form Groupe de la Cité.

In February 1988, under the instigation of Ambroise Roux but equally at the request of Christian Br´gou, Havas and G´nérale Occidentale sealed the alliance that would combine the publishing activities of their respective subsidiaries, CEP and Presses de la Cité. The new Groupe de la Cité was a holding company owned in equal shares by CEP and Générale Occidentale. The two leaders of French publishing, Hachette and Groupe de la Cité, soon secured for themselves 55% to 60% of French book publishing. Christian Brégou now took control of the group, responding to the need for a real strategy. This need had been expressed in particular by the 800 employees of Presses de la Cité who, in less than a year, had had four presidents and managing directors--Claude Nielsen, James Goldsmith, Bruno Rohmer, and finally Christian Brégou. From the start, Brégou introduced a barracks-like atmosphere at the group, with everyone at daggers drawn, to such an extent that the employees rechristened the publishing house "Stress de la Cite." The new head of the group was a businessman, who valued his authors chiefly according to the profits they generated. The group's success grew rapidly. The publishing division employed 2,300 people, and out of total group sales of FFr5 billion in 1988, FFr2.6 billion came exclusively from publishing. Brégou's goals were clear: "to become a world leader and the foremost European publishing house in the field of education and reference books." In an interview published in December 1990, he added: "General literature is to reference publishing what haute couture is to pret &agave; porter: one follows the tide, while the other is expressive of an established savoir-faire."

The group covers the complete range of educational books, from school level--with the addition in 1975 of Bordas, plus Larousse-Nathan--to university level. It also offers general literature via the publishing houses controlled by Presses de la Cité, as well as paperback books, such as Presse-Pocket and Fleuve Noir.

The team composed of Jean-Manuel Bourgois and his brother Christian became important in the group. The former became managing director of Groupe de la Cité and president and managing director of Presses de la Cité, while Christian, who had founded the publishing house Christian Bourgois in 1966, rapidly became known for the quality and high reputation of his books, largely translations, and in 1989 published Salman Rushdie's The Satanic Verses. In rivalry between the two brothers they were called "Jean-Manual" and "Christian-Intellectual."

In July 1989 Christian Brégou bought Editions Dalloz, the leading French legal publishers, founded in 1845 by Désiré Dalloz and incorporating the brand names Dalloz, Sirey, and Clet. This acquisition contributed profits of FFr175 million to Groupe de la Cité in 1989. Finally, the group turned its attention overseas. In Spain, Larousse formed a Madrid-based subsidiary for all the Spanish language versions of Larousse publications and for the promotion of the new group products. In the United Kingdom, the group acquired a controlling interest in Chambers, one of the oldest publishers of English-language and specialized dictionaries. Its London-based subsidiary, Grisewood & Dempsey, experienced strong growth in 1989. In the United States, a subsidiary of Groupe de la Cité formed a new company, Millbrook Press Inc., with the help of a team of seasoned reference book professionals. France-Loisirs already had numerous affiliates in French-speaking countries and in Germany. Nathan's Belgian publishers Hemma, a 40% subsidiary of the group, specialized in books for children with offices in France, Belgium, Spain, Germany, and the Netherlands.

Although the components of the group are not formally linked, the resulting organization is powerful nonetheless. The almost craftsman-like tradition of the publishing world of the 19th century, embodied in the beginnings of Nathan and Larousse, is as important in the history of Groupe de la Cité as the merging of large communications groups. Equally important is the influence of the "godfathers" of the Groupe de la Cité, such as Havas, which achieves sales of FFr13 billion, or CEP, which is the owner of many French newspapers and comrnunications organizations.

Principal Subsidiaries: Larousse; Nathan; Bordas; Presses de la Cité; France-Loisirs (50%).

GROUPE DE LA CITÉ History

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