Translated by
Jennifer Braun
Oct 23, 2018
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B&M buys French discount chain Babou

Translated by
Jennifer Braun
Oct 23, 2018

Babou has fallen into the hands of the British. The French brand (clothing, home, and bazaar) has been sold to another discount player -- British giant B&M European Value Retail.

The group, owned by the Arora family, operates the chain of B&M branded stores and concluded the deal with Paminvest, the parent company of Babou.

Discussions surrounding the transaction have been in the works for the last three years, since B&M was listed on the London Stock Exchange in 2014.

The store in Chambray-les-Tours, opened in April 2018 - Babou

The seller of the business is none other than PIM Participations, driven by the Kléboth family, the chain’s founder born in Auvergne in 1978. The transaction valued at 91.2 million euros, including its debt, will allow the brand to join a well established group with a network of 591 discount stores under the B&M banner and 269 Heron Food stores (low-cost food), as well as 88 Jawoll outlets in Germany (bazaar). B&M sells a small clothing offer, but is mostly limited to footwear and homewares.
Babou stores, located in the French outskirts in 2,500 square metre spaces on average, generated 347 million euros in 2017, accompanied by an EBITDA of 24.7 million euros. The stores will serve as a point of entry for the British group to establish themselves in the French market.

"The acquisition of Babou will serve as the basis for B&M to develop and grow its proven and profitable distribution model," the group said in a statement, adding that the coming year would be a transitional step in order to align its product offerings with that of Babou. The fashion offering could, therefore, potentially shrink in-store.

The brand's clothing offer displayed in a very simple layout - Babou

The Babou network operates in France under a representative manager. Each store manager is independent and employs his own sales team, but operates the point of sale on behalf of the owner. Babou directly employs less than a hundred employees in France, with most located at its headquarters in Cournon-d'Auvergne, near Clermont-Ferrand.
The shareholder change is also accompanied by a new management at the head of Babou. Thierry Morter, its general manager for eight years, will make way for Cédric Mahieu, who was appointed director of European operations of B&M in January 2018.

The latter built his career at Auchan for 13 years, in sourcing and purchasing, before becoming the purchasing manager of La Foir'Fouille between 2014 and 2017. His recruitment last year was performed by B&M with this latest acquisition in mind.

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