Marc Piessens, chief executive of United Brands, has regained nearly full control of this Belgian sports retail company by buying back a 15 percent stake that he had sold to Beluga, a private equity fund. Piessens had leaned on these investors a few years ago to help finance an aggressive expansion program that allowed him to build up a chain of 16 stores all across Belgium. However, the five outlets that the group opened in Wallonia, the French-speaking region in the south of the country, all generated such losses that Piessens decided to close them down last year and to concentrate on restoring the company’s financial situation.
The buy-out of Beluga’s stake, which became effective from the beginning of this year, will still not give Piessens effective control over his company. He will hold 99 percent of the shares, but a venture capital firm, Fortis Private Equity, has a convertible loan outstanding that would give it 48 percent of the company’s capital. Piessens plans to redeem the loan by 2011, with a view to a potential stock market launch.
The pullout from the Walloon region of Belgium left United Brands with only 11 stores, all in the affluent Flanders region of the country and all performing rather well. Last Fall, the management was expecting to reach net sales of about €28 million in 2006, with an average increase of 8 percent on a same-store basis, much better than the Belgian market.
United Brands concentrates on relatively high-end product ranges, with an emphasis on winter and action sports. With two big flagship stores in Antwerp, the stylish Flemish capital, and with other units in the region, United Brands enjoys a very strong position in the northern part of Belgium since Go Sport’s recent pullout from that area of the country, enabling the group to achieve high sales per square meter.
It has a 1-year-old test store of 600 sqm. trading under the Boardriders banner in Antwerp, selling mostly surf-related and lifestyle products under the Quiksilver, Animal, Billabong and Burton brands, and this format may be rolled out more widely if it proves successful.
