5àSec takes over chain in Brazil and speeds up expansion
Valor Econômico 09/28/10
The strong growth of the Brazilian market in recent years has led the French group of laundromats 5àSec to redesign its strategy in the country. Responsible for 26% of the revenue of the company in the world, the Brazilian operation has become so large and profitable that the company headquarters in Paris decided to acquired the operation of the master franchise in Brazil. This way, the headquarters take over the management of the businesses in the country and prepares an aggressive expansion plan focusing on its own stores both in Brazil and in Latin America.The 20% expansion a year, on average, in the gross income of the Brazilian stores, since 2006, made the front line of the company redefine the local business plan. This year, 5àSec should earn nearly R$ 200 million (US$ 114.3 million) in the Brazilian market, a 28% expansion compared to the previous year. In Europe, in the last three years, such growth rate has not exceed 6%. "The speed of expansion in Brazil is very strong. We were even a little envy of what the company has around here", jokes the International President of 5àSec, David sztabholz. "We realized it was the time to get closer to Brazil", said the Executive, who is in the country until this Thursday to present to franchisees the changes in the structure of the operation.
They were eight months of negotiations between the franchiser and the franchisee, Nelcindo Nascimento, who brought the business here in 1994. They got to an agreement and signed the contract little more than a week ago, but Nascimento and Sztabholz do not disclose the values of the deal. As agreed, Nascimento ceases being the master franchisee in the country (such role stops existing) and becomes the managing officer of 5àSec Latam. He will be the Executive hired by the group for the region, in charge of the management of the company in Brazil, Argentina, Chile and Mexico. Besides, Nascimento has become a member of the Board of Directors of the company, headquartered in Paris.
5àSec has 320 stores in Brazil; only three units are own stores. But the company has already made it clear it is willing to acquire units from franchisees interested in disposing of the operation. It is part of a plan to increase the earnings of the group in the country. The laundromat chain plans to reach one thousand units in Latin America by 2014 - at the moment, there are 600 units. A recent performance indicator that helped strengthening the optimism of the headquarters in the country has just been informed by the company to the executive body of the company. According to the official announcement, Brazil has become the largest operation of 5àSec in the world. The feat was achieved in August as they became the leading company in terms of number of stores and monthly earnings. With 323 units, Brazil overcame France, with 308 units, and Portugal, with 290 stores. The company does not inform the earnings per operation.
According to Nascimento, in case the company reaches the total of one thousand units in Latin America by 2014, the executive estimates the region will be responsible, in four years, for half of the total units of the French group in the world. The 5àSec chain, with € 300 million earned in 2009, has more than 1.8 thousand units in 25 countries.