Blokker Holding B.V.

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Blokker Holding B.V.

Postbus 94072
Amsterdam,
Netherlands
Telephone: (31 020) 568 35 68
Fax: (31 020) 665 14 67
Web site: http://www.blokker.nl

Private Company
Incorporated: 1896 as De Goedkope Ijzer- en Houtwinkel
Employees: 17,435
Sales: EUR 2.2 billion ($3.07 billion) (2006)
NAIC: 423220 Home Furnishing Merchant Wholesalers

Blokker Holding B.V. is the holding company for one of the Netherlands' most powerful retail store groups. Blokker operates nearly 2,700 stores, including flagship Blokker, a variety and toy store format. Blokker also controls Bart Smit, the Netherlands' leading toy store format; together with Blokker's other toy stores, including the Intertoys chain and toy sales at the Blokker and other outlets, the company controls more than 65 percent of the Dutch toy market. Other Blokker store brands including Casa, Xenos, Marskramer, Leen Bakker, Giraffe, Gifts and Dreams, Holland Handels Huis, and E-Plaza. Although Blokker is especially present in its home Netherlands market and is one of that country's largest retailers, it also has extended its operations into Belgium, France, Spain, Germany, and nearly ten other countries. While the company owns many of its stores, a significant proportion of its retail networks operates along a franchise model. Nonetheless, the company tightly controls its brands, including stores' product offerings. A private company, Blokker Holding is owned by brothers Jaap and Albert Blokker, grandsons of the company's founders. In 2006, Blokker Holding posted total sales of EUR 2.2 billion.

MARKETING PIONEER AT THE TURN OF THE 20TH CENTURY

Blokker grew from a small shop opened on Het Breed, a major shopping street in the village of Hoorn, in the Netherlands, in the 1890s. Hoorn was at the time an important center for the Dutch flower sector, as well as for the region's cheese and livestock producers, and in order to serve visiting farmers, Jacob and Saapke Blokker began selling a wide variety of goods. The Blokkers showed their understanding of the possibilities of marketing with the name of their store: "De Goedkope Ijzer- en Houtwinkel" (literally, "The Inexpensive Iron and Wood Shop"). The store was successful quickly, in large part due to the company's willingness to sell goods less expensively than its competitors in town.

Yet the Blokkers went still further in marketing to their customers. One feature of the store was a wood stove, installed so that customers could warm themselves on cold winter days. The Blokkers were also among the first in the region to hold special sales events—which were given names such as "Sensatiedagen" (Sensational Days) and "Schoon Schip Dagen" (equivalent to Spring Cleaning). In this way, the Blokkers proved far ahead of their time. Blokker was also the first in Hoorn to feature display windows, further attracting customers to the shop.

The growing store expanded through the early years of the next century, and by the early 1920s had added four more stores along Het Breed. In 1923, the Blokkers acquired a new larger property and opened its first large-scale store. The choice of a prime location—in this case, at the corner of the Veemarkt and Het Breed—played an important role in the company's success.

The Blokkers turned over the business to their four sons in 1936. Renamed as Gebroeders Blokker, the company began its expansion throughout the Randstad (the most populated region of the Netherlands) with each brother opening a Blokker store in a different location. In this way, the company had stores in Amsterdam, Haarlem, and Utrecht by the end of the 1930s. As with the original Hoorn store, the new stores were all located on main shopping streets, such as Amsterdam's Kalverstraat. The expanded network provided the company with greater purchasing power, and, following World War II, Blokker continued its expansion. By the end of the 1960s, the company had more than 20 stores throughout the Randstad region.

Blokker's strong growth had by then attracted the attention of the Netherlands' retail sector. In 1964, the company received a buyout offer from fast-growing retail leader Albert Heijn. Two of the brothers (a third had died by then) were interested in selling the company. The fourth brother, Ad, who operated the company's Amsterdam store, had planned on turning the business over to his sons, Jaap and Albert. Instead of allowing the company to be sold to Albert Heijn, Ad Blokker bought out his brothers' shares, matching the offer from Albert Heijn.

BUILDING A NATIONAL LEADER IN THE FINAL DECADES OF THE 20TH CENTURY

Both Jaap and Albert Blokker had long been involved in the company, having grown up above the family's Kalverstraat store. Jaap Blokker, the older of the two, started working for his father part-time at the age of 12, operating the elevator at the Kalverstraat store. Blokker joined the business full-time at the age of 21, just a year before his father bought control of the company. Jaap Blokker rose quickly in the company, and by the age of 25 was named to its board of directors.

Blokker took direction of the family business and its 22 stores in the early 1970s, and by 1976 had become the company's chairman of the board. The new generation quickly built the Blokker chain into a national success story. Jaap Blokker proved to have strong business instincts, and took a hands-on approach to leading the company, including approving every product sold in its stores. Under Blokker, the company developed a tightly controlled product range (every store sold exactly the same items as all the others) and format. Blokker himself spent a great deal of time in the stores, even operating the cash registers.

One key to the company's success was its commitment to offering low-priced goods. To this end, Blokker became one of the pioneers of the Asian outsourcing model that was later to sweep the rest of the world. Blokker became one of the first to travel to the Asian region to seek out low-priced factories capable of producing products to his specifications. As a result, the Blokker chain was able to offer products no other store in the Netherlands had, or at prices no one else could match.

KEY DATES

1896:: Jacob Blokker and wife Saapke open "De Goedkope Ijzer- en Houtwinkel" in Hoorn, the Netherlands.
1923:: Blokker moves to a larger store in Hoorn.
1936:: Blokker's four sons take over the business, which becomes Gebroeders Blokker, and open stores in Amsterdam, Utrecht, and Haarlem.
1954:: Jaap Blokker begins working part-time at father Ad Blokker's Amsterdam store, operating the elevator at the age of 12.
1963:: Jaap Blokker becomes a full-time member of the company.
1964:: Ad Blokker buys out his brothers' share of the company.
1976:: Jaap Blokker becomes chairman of the company and, joined by brother Albert, leads a new era of expansion.
1985:: Blokker acquires the Bart Smit toy store chain.
1988:: Blokker acquires the Casa home furnishing chain in Belgium.
1993:: Casa expands into Spain, France, and Portugal.
1997:: Blokker reorganizes as Blokker Holding.
1999:: Blokker calls off its public offering at the last minute.
2005:: Blokker acquires the Christiaensen toy store chain in Belgium.
2006:: Sales top EUR 3.2 billion ($3 billion).

Through the 1970s and into the 1980s, the company launched a massive expansion drive, quickly adding new stores and expanding to a national scale. In this effort, the group maintained the policy of seeking out the best high-traffic locations in the country. The increasing purchasing power of the group further enabled it to compete on pricing. Blokker became a ferocious competitor. As an example, when one competitor lowered its prices on Lego toys, Blokker quickly countered, slashing its own prices by as much as half—accepting a loss on its sales in order to maintain its market share.

Joined by younger brother Albert, Blokker began expanding in new directions in the mid-1980s. As toy sales formed a significant proportion of its own stores' sales, the company was drawn to the specialist market. Blokker's opportunity came when the fast-growing Bart Smit chain hit a financial bump. The Bart Smit group had its origins in the mid-1960s, when Bart Smit took over his parents' shop in Volendam, a variety shop called Gaartje van Koppie. Smit also sold goods from a handcart at the market, but soon began opening new stores under his own name. Before long, Smit decided to specialize in the toy market, and the company grew strongly through the 1970s. By the early 1980s, Smit had expanded to a national scale, buying the Brabante region's Van Nunen Boes and its ten stores, in 1980. Finding himself short of cash, however, in the mid-1980s, Smit agreed to sell his chain to Blokker in 1985.

Under Blokker, the Bart Smit chain accelerated its expansion, becoming the Netherlands' leading retail toy specialist, with more than 100 stores. Smit also entered the Belgian market, opening its first store there in 1989. By the mid-first decade of the 2000s, the Bart Smit chain counted nearly 250 stores, including more than 40 in Belgium and its first store in Luxembourg. By then, too, Smit had spawned a second format, specialized in computer and video games, called E-Plaza. Launched in Amsterdam in 1999, the E-Plaza format grew to more than 30 stores by the middle of the first decade of the 2000s, including five stores in Belgium. The development of E-Plaza was also a result of Smit's mid-1990s shift from a focus on traditional toys to newer generation electronic and television and "trend" toys, such as Pokémon, and the like.

MULTI-FORMAT LEADER IN THE NEW CENTURY

Blokker itself had in the meantime been expanding its own range of store formats. In 1988, Albert Blokker moved to Belgium to take over the popular Casa home furnishings store brand there. Founded in 1975 in Ottignies, Casa grew rapidly as part of the Blokker group and grew into the group's most international format. Casa added its first international stores in the early 1990s in Spain, France, and Portugal. By the middle of the first decade of the 2000s, more than half of the Casa network's 500 stores were outside of Belgium.

At the same time, Blokker had been building up an impressive range of store formats in the Netherlands, acquiring such well-known chains as Xenos; the 200-strong chain of Marskramer stores, a Rotterdam-based household goods specialist, as well as its Toys2Play toy store format; the mid-priced toy specialist Intertoys; and Belgian household furnishings group Leen Bakker, among others. Both Xenos and Intertoys also provided the company with an entry into the German market.

Not all of Blokker's expansion efforts proved successful, however. In 1996, the company reached a franchising agreement with the Toys 'R' Us chain in the Netherlands. As part of that agreement, Blokker planned to acquire the Dutch Toys 'R' Us operation and its stores. Because the deal threatened to give the company a near monopoly on toy sales in the Netherlands, however, the effort was blocked by the European Commission in 1997. As a result, Blokker was ordered to sell the Toys 'R' Us chain. Nonetheless, the company was allowed to maintain a minority shareholding in the Dutch Toys 'R' Us operation.

Another setback came in the late 1990s, when Blokker attempted to block the sale of the KBB retail group to rival Vendex. That company, which controlled the Vroom & Dreesman department store group, also operated the Hema retail chain, the main rival to Blokker's own flagship Blokker store chain.

By then, Blokker had adopted a new organizational structure, creating the Blokker Holding vehicle in 1997. This move became part of the group's intended public offering, slated for 1999. At the last moment, however, Jaap Blokker refused to go through with the public offering, in large part because he feared that the Blokker family might lose control of the business.

Yet the failure to go public raised questions about the problem of succession for the company. Indeed, Jaap Blokker remained the company's highly dominant force, holding tight control of its day-to-day operations. By then approaching his mid-60s, Blokker had no immediate available successor in sight, despite the presence of one of his children in the company. As one observer told Intermediar: "It is a difficult, if not impossible job. We're talking about someone who has built something from nothing. It's damned difficult to be in that kind of shadow."

The traditionally publicity-shy Blokker had in the meantime found himself the subject of a great deal of controversy in the early 2000s. Although the company had not gone public, it had begun publishing its own annual report of sorts, which quickly developed into a platform for Blokker's highly conservative ideas—including his opposition of the country's immigration and asylum policies. With statements considered racist by some, Blokker was thrust into the public eye.

Nonetheless, Blokker Holding remained one of the Netherlands'—and Europe's—strongest retail concerns in the early 21st century. The company grew again in 2004, buying Belgium toy store brand Christiaensen. Based in Antwerp, Christiaensen owned nine stores directly, with 25 franchised stores in its network. In 2005, Blokker began rebranding the Christiaensen stores under the Intertoys format, including its own nine stores, and 17 of the franchised stores. Following that acquisition, Blokker was rumored to have begun planning to expand the Intertoys format into the French market as well.

Blokker celebrated its 110th anniversary in 2006 with sales topping EUR 2.2 billion and an international network of nearly 2,700 stores. Under leader Jaap Blokker, the company had emerged as a true European retail leader, with a dozen store formats operating in as many countries. While questions of succession continued to shadow the company's future, Blokker hoped to remain a major name in retailing for another century.

M. L. Cohen

PRINCIPAL OPERATING UNITS

Bart Smit; Blokker; Casa; E-Plaza; Gifts and Dreams; Holland Handels Huis; Intertoys; Leen Bakker; Marskramer; Xenos; Giraffe; Hoyng; and Tuincentrum Overvecht.