C&A

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C&A

Senneberg
Jean Monnetlaan
Vilvoorde
Belgium
Telephone: (+ 32) 22576864
Fax: (+ 32) 22576512
Web site: http://www.c-and-a.com

Private Company
Incorporated: 1841
Employees: 35,000
Sales: EUR 5 billion ($5.7 billion) (1999)
NAIC: 448120 Women’s Clothing Stores; 448130 Children’s and Infants’ Clothing Stores; 448110 Men’s Clothing Stores

C&A is a paradox. It operates nearly 450 highly visible retail clothing stores throughout Europe, but the company itself, controlled by the Brenninkmeijer family, has long been a highly secretive, privately owned corporation. Little has been published on the organization and it is hard to get information from the company on its operations beyond publicity for its fashions. Nonetheless, since the late 1990s the company has attempted to open up a bit, adding its first non-family members to the board of directors and publishing financial data for the first time. Moreover, C&A certainly wants customers to know all about its range of company-owned brands, including Clockhouse—itself being transformed into a retail chain at the beginning of the new century—Here & There, Kid’s World, Signé Incognito, Westbury, Yessica, Canda, and others. In 2000, C&A pulled out of the United Kingdom, shutting down 113 stores. The company has focused its attention instead on entering the Latin American market, launching its first stores in Mexico, with plans to open 30 stores in that market by 2009.

Peddling a Clothing Empire in the 19th Century

The Brenninkmeijer family had its roots in Mettingen, a small community in the Tecklenburg area of today’s northwest Germany, not far from the present border with the Netherlands, a country with which the area has strong links. Originally, Tecklenburg natives spoke a dialect of Low German with some resemblance to Dutch. Especially in the 17th century, Holland’s golden age, much of the area’s commerce focused on Holland’s international ports and rich trading markets. The Rhine River and canals still link much of northwest Germany to the ports of Rotterdam and Amsterdam.

The first trading Brenninkmeijers left the family farm in Mettingen in 1671 to become traveling linen sellers in Holland. Even then the family was said to be secretive about their business. At this time, secrecy gave them a commercial advantage and permitted the avoidance of customs charges.

In 1841, the brothers Clemens and August Brenninkmeijer abandoned the itinerant life and laid the groundwork for the C&A chain when they opened their first store in the small Dutch town of Sneek. The store pioneered sales of affordable ready-to-wear clothing. The small firm of textile sellers was very successful, and within the next few years further stores were opened in the Dutch cities of Leeuwarden, Amsterdam, Utrecht, Rotterdam, Groningen, Leiden, Haarlem, and Enschede. The company was eventually to take its name from the initials of the Brenninkmeijer brothers’ first names, opening the first official C&A store in 1861. Many of Clemens and August Brenninkmeijer’s descendants were active in the company throughout its history. Indeed, for a time, male members of the family, upon reaching the age of 14, were given the choice of entering the family business or joining the Catholic priesthood. Even then, family members entering the business were subjected to the family’s codes of conduct and secrecy.

Expansionism Before World War II

The second Clemens Brenninkmeijer became the driving force behind the family’s expansion into Germany. In 1911 he opened C&A, the family’s first large German department store, in Berlin. In the next year he opened another Berlin clothing store. In 1913 new branches were opened in Hamburg and Cologne and in 1914 another store was established in Essen. World War I presented the family with few international problems, because Holland remained neutral throughout the conflict.

After World War I, Germany became the major focus of expansion, despite its inflation and other economic problems. By hard work and constant travel between branches, Clemens Brenninkmeijer made a success of the German operation. By 1928, C&A had eight stores, and at the outbreak of World War II, there were 17.

Clemens Brenninkmeijer’s efforts at further international expansion were only partially successful. The first British store was opened in London’s Oxford Street in 1922. Later in the decade, other British stores were opened in Birmingham and Liverpool.

In contrast, C&A’s most successful field of operations, Germany, was coming under the control of the strongly nationalist and anti-Semitic Nazi regime. The Dutch Catholic family had to come to terms with this new German government. C&A’s Dutch background put its German expansion plans at risk. Nazi laws required the firm to gain government permission to open new branches. Some Nazis were also suspicious of the firm’s church connections.

The firm emphasized its pre-Nazi, anti-Jewish hiring policies and the family’s distant German origins. In a 1937 application to open a store in Leipzig, the board asked for assistance from Hermann Göring, the author of the state economic plan, and successfully argued that it had struggled against Jewishowned business and prohibited the employment of Jews in the past, writing that the family had “penetrated the power held by the Jewish textile industry.”

Against further 1938 allegations by influential Nazi party members that C&A was Dutch, the firm’s Berlin representatives stressed the Brenninkmeijer family’s German roots in Mettingen. They claimed the family had been forced to take Dutch citizenship by a 1787 law.

World War II brought hardship as the officially neutral firm was cut off from its stores in England by the German invasion of Holland in 1940, and merchandise supplies became harder to obtain because of rationing. As the tide of the war began to turn in favor of the Allies, the Brenninkmeijers began to return to the Netherlands. By the end of the war, only two of the firm’s 17 German locations remained relatively unscathed by bombing and fighting. In liberated Holland, however, the company faced government scrutiny, when the Dutch government insisted on inspecting the company’s financial records from during the war. At that time, the Brenninkmeijers changed the company’s status from a limited company to a wholly private concern. The company was to take a similar tactic later in Germany. In the meantime, secrecy remained a family policy. The company’s growing international interests were presented as independent, country-specific organizations with no connection to the German company—soon to be the largest part of C&A’s organization—and the original Dutch branch.

Postwar International Growth

As the West German Wirtschaftswunder—economic miracle—proved to be a powerhouse in the rebuilding of the wider European economy, the Brenninkmeijers returned to make Germany the focal point of their business empire again. The 1950s and 1960s were boom years for C&A in Germany. From 1952 to 1971, the number of C&A clothing and textile stores rose from 17 to 72. By 1982 there were 116 branches worldwide. Dusseldorf became the company’s center of operations in the early 1950s.

The booming economic climate of the 1960s stores encouraged C&A to spread its name beyond Holland, England, and Germany. The company opened its first Belgian store in 1963, later building a network of 37 stores in that country by century ’ s end. As the Brenninkmeijers came under pressure from German authorities to publish their company’s financial information, Belgium was to become still more important to the company as the city of Vilvoorde was chosen for the site of its headquarters. C&A was also looking to expand into the U.S. market. In 1963 the company fulfilled that long-cherished dream with the acquisition of seven Nathan Ohrbach retail stores.

Throughout the postwar period, secrecy remained a pillar of C&A corporate policy. Important members of the Brenninkmeijer family on the governing board were hardly known outside of Europe’s financial circles. When any of C&A’s management were quoted in the press, statements tended to remain limited to company sales policy, such as “No store sells cheaper” or—the most famous statement—“We let our merchandise speak for us.”

The desire for secrecy was so important that it led the firm to change its legal status again. After the German Bundestag passed new disclosure rules for the GmbH (Gesellschaften mit beschränkter Haftung), C&A Brenninkmeijer became a KG (Kommanditgesellschaft), or limited partnership, in September 1969. The move allowed the family to withhold much of the company’s financial information from the public.

Company Perspectives:

We put the customer first, always, by offering the best quality fashion clothing at the most competitive prices, across a wide range of merchandise-high fashion items or just basics-to meet the many different needs and tastes of customers. In doing this, we are committed to a simple ethic: to contribute to the well-being of our customers, our staff, our suppliers and our partners, by observing standards of behaviour that respect the individual and the collective interest.

We call this approach “the C&A formula “and it has served the individual C&A companies well, since we started over 150 years ago.

Secrecy seemed to insulate the company from change and criticism of other policies that appeared anachronistic. The company’s paternalism and preference for hiring Catholics attracted particular criticism from the media. Recruits were required to be devout Catholics and attend mass. The rest of the week was devoted to work training and study for compulsory examinations. If managers became engaged, they were required to give the company details on the betrothed’s parents and religion. Non-Catholic affianced partners were expected to convert or, in accordance with the Catholic Church’s teachings, to at least agree to a Catholic ceremony and Catholic religious education for the couple’s children. The company’s governing board and top management positions remained dominated by members of the Brenninkmeijer family and those related to them through marriage.

Meanwhile, the company’s success in Belgium encouraged it to extend its stores and fashions to other European countries. In 1972, the company opened its first C&A stores in France. These were followed by Switzerland in 1977, Luxembourg in 1982, Spain in 1983, and Austria in 1984. The company also brought its stores to Brazil, where it quickly built a leading market position. Despite its international expansion, C&A maintained centralized buying policies, helping it to reduce its costs and offer fashionable clothing at low prices. Yet, while the company was finding success in its new markets—in France, the company’s retail chain was to reach more than 50 stores by century’s end, while Switzerland was to boast 30 retail stores of its own—in the United Kingdom, C&A was entering a long, slow decline. A chief cause of its problems in that market was the company’s slow reaction to the growing fashion awareness of the U.K. consumer—a situation brought on in part by the family’s centralized buying operations. In the 1970s and 1980s, C&A began to play catchup in the U.K. market, attempting to reinvent itself as a seller of trendy fashions. Nonetheless, the company, which extended its chain to 110 stores throughout the United Kingdom, enjoyed a position as that market’s leading retailer.

C&A proved equally slow to react to the collapse of the East German regime in November 1989 and to subsequent German unification. This initial reluctance was partly its usual caution, but was also due to the need to settle property questions over prewar store sites in Leipzig and elsewhere. After C&A’s inexpensive fashions proved popular with East Germans living near the border, making a strong contribution to 1990 profits, the company required no more convincing to expand into the former East Germany.

By autumn 1991, new C&A stores had opened in Guntherstadt, Chemnitz, formerly Karl Marx Stadt, and Magdeburg. There were plans to reopen a C&A on a prewar site in Leipzig. West German expansion continued, however, with new stores planned in Lunen, Ingolstadt, Ravensburg, and Regensburg. Some expenditures and expansion plans elsewhere were reduced in order to concentrate on investment in a unified Germany.

Growing Toward list-Century Openness

In the 1990s, C&A continued to identify new national markets in which to establish its store. The company targeted Portugal in 1991, opening five more stores through the decade. C&A also attempted to enter Denmark in 1995, with more limited success when faced with Scandinavian rival H&M. In 1996, C&A moved to South America, opening the first of five stores in Argentina, where the company pledged to invest $2000 million. C&A also entered the Irish market in 1998. Meanwhile the company’s U.K. operations were coming under increasing pressure. A wave of new competition, such as the expanding Marks & Spencer chain, New Look, Next, and many other, more fashionable clothing retailers, had knocked the steam out of the company’s U.K. sales. The dominant influence of Germany on C&A’s clothing fashions proved disastrous for its U.K. branch, as the two country’s fashion senses appeared wholly different. By 1995, the company’s U.K. operation was losing money.

C&A attempted to revive its U.K. branch in 1998, announcing a £200 million investment program in upgrading its stores, coupled with the closing of a number of its poorest performers. The company also suggested that it intended to move toward a greater openness, shedding at least part of its historical secrecy. In 1997, the company had already taken a first step toward opening up to the financial world when it appointed two non-family members to its board of directors for the first time. The company, which had been juggling a portfolio of more than 20 different fashion brands, also streamlined its brands to just ten, including Clockhouse, for which the company began developing its own retail store concept. By 2001, the company had six Clockhouse stores in operation

C&A’s hopes to restore its U.K. operations proved to be in vain. In 2000 the company suddenly announced its intention to exit the U.K. market entirely, closing its remaining 109 stores and placing nearly 5,000 employees out of work. The last C&A store closed its doors in January 2001, ending nearly 80 years of C&A operations in the United Kingdom.

Instead, C&A turned its attention to building its name in new markets. The company began investing in Mexico, opening two stores by 1999 and announcing its intention to open as many as 30 stores in that country by 2009. C&A was also becoming interested in the growing economies of the East European countries. In 1999, the company opened its first store in the Czech Republic.

Key Dates:

1841:: Brothers Clemens and August Brenninkmeijer open their first store in Sneek, Netherlands.
1861:: Company adopts C&A store name, after the initials of the founders.
1911:: C&A expands into Germany.
1922:: Company opens first U.K. stores.
1945:: C&A converts to a private company.
1950:: C&A transfers headquarters to Dusseldorf.
1963:: Company moves into Belgium.
1972:: Company opens stores in France.
1977:: C&A enters markets in Switzerland and Brazil.
1982:: Company launches operations in Luxembourg.
1983:: C&A begins operations in Spain.
1984:: Company enters Austria.
1991:: Company opens its first store in Portugal.
1995:: C&A opens Denmark store.
1996:: Company enters Argentina.
1998:: Company enters Ireland.
1999:: C&A enters Czech Republic and Mexico.
2001:: C&A closes entire U.K. operations.

Despite its growing openness, C&A remained wholly controlled by its founding Brenninkmeijer family, which ranked among the world’s wealthiest families with a fortune estimated to be worth more than $5 billion. Entering the 21st century, the internationally operating company exhibited little interest in changing its private status.

Principal Subsidiaries

C&A Unterstutzugskasse GmbH; C&A Nederland CV; C&A Mode AG (Switzerland).

Principal Competitors

Benetton Group S.p.A.; Esprit Holdings Limited; Etam Développement; H&M Hennes & Mauritz AB; New Look Group plc; Next plc; Metro AG; Pinault-Printemps-Redoute SA.