DirectGroup Bertelsmann Acquires France’s Biggest Independent Bookselling Chain Privat

DirectGroup Bertelsmann is acquiring 100 percent of shares in Privat, France’s largest independent bookselling chain. The move will strengthen its position as # 2 book distributor in the French market, after FNAC. The parties have agreed to maintain strict silence about the purchase price. Privat had turnover of €125 million in 2004, and has a total of 32 branch stores, six of them in Belgium. The company has 700 employees. The takeover has been filed with the antitrust authorities and is pending antitrust approval.

This gives DirectGroup a third mainstay in the French book market, beyond the 204 shops operated by its France Loisirs book club and the five “Place Media” department stores established in partnership with local booksellers. Marc Oliver Sommer, Managing Director of the French DirectGroup business, said: “The takeover of Privat is a logical next step in our strategy of catering to new customer groups beyond the club’s purely member-based business. The Place Media approach, based on the concept of a complementary partnership between Club store and bookstore, has been a very positive experience for us. Privat enhances our portfolio of offerings in the book market; we now take advantage of all the opportunities arising from the intercommunity of club and bookstore in the interests of our customers. We will continue to strive for growth in all three segments.”

DirectGroup CEO Ewald Walgenbach added: „The French approach serves as a model for club businesses throughout Europe. Based on the positive experiences gained in France, we will develop concepts for a closer combination of club and bookstores in other countries as well, in order to win new customers. This strategy will be a key component in bringing the entire division back on track for growth.”

Privat will continue to do business under its existing brand. The company’s founder, François d’Esneval, and his current management team will continue to manage its business operations. The book chain has shown steady double-digit growth in recent years, and is profitable. In its capacity as the new owner, Bertelsmann will continue to pursue this expansionist course. France Loisirs’ photo-processing business Photocité will be introduced at all Privat branches. The club’s expertise and experiences gained from the Place Media concept will be used for Privats’ chain of stores depending on their location, e.g. in the form of customer loyalty schemes or shop-in-shop solutions. The plan is to integrate and migrate individual club shops into Privat stores.

About France Loisirs:
France Loisirs is the largest French book and media club, with 3.7 million members and 204 branch stores. The club commands an approximately 8 percent share of the book market in France. It is a wholly owned subsidiary of DirectGroup Bertelsmann, a subsidiary of Bertelsmann AG headquartered in Gütersloh, Germany. France Loisirs is profitable and increased its revenues yet again in 2004. The France Loisirs group, with annual revenues of more than €450 million, also includes France Loisirs in Switzerland, Belgium and Canada. Marc Oliver Sommer is Managing Director of France Loisirs.

About Place Media:
The media department stores newly established by France Loisirs in 2004 are characterized by their choice locations in small and medium-sized French towns. Each Place Media is operated in partnership with a local bookseller. Their range includes an integrated France Loisirs Shop, a generous selection of books, the Photocité photo shop and an extensive range of CDs, DVDs and multimedia. Place Media won the French “retail Oscar” called „Enseigne d’Or“, as the most attractive retail architecture in 2004.

About Privat:
With 32 branch stores (six of them in Belgium) in larger cities and 700 employees, Privat is France’s biggest bookselling chain. It is profitable, has shown positive growth for a number of years, and generated revenues of €125 million in 2004. The chain is successfully managed by its founder François d’Esneval. The average size of the individual bookstores is 900m² (approx. 9,700 ft²).