FRANCE/SPAIN. Continuing with international development in both retail and food services is the theme taken up by Robert Zolade – co-president and co-founder of Ãreas parent company Elior – in an important interview this week.
Zolade was speaking to Spanish business daily Expansión on the relationship between Elior and its financing partner, global private equity firm Advent International, that yielded the 11.5% indirect stake in Dufry to the Ãreas subsidiary (The Moodie Report, 2 March 2004).
“With this acquisition we are in a position to negotiate an association with Advent, which is an associate close to ourselves and that was already [made] in the origins of Elior,” explained Zolade.
After the entrance of Elior in Dufry, the world’s fourth largest travel retailer, the Ãreas Spanish subsidiary of the French group has become the tip of the spear to enter more airports. The group said it sees a growing market and it is also encouraged by the greater limitations in the service of inflight food, which is set to boost the expenditure of the one-in-four passengers who spend on either food or merchandise in airports.
Another objective, Zolade said concerns the managing director of Elior International, Gilles Cojan, whose role is to create a group leader in duty free. “As Ãreas has experience in airport retailing, we have been pragmatists and we have carried out the operation through our managing partner in Spain, Ãreas and José Gabriel Martín. This reflected the strategy and the politics of the group,” said Zolade. Elior International groups together Elior’s activities operated directly in the UK, Netherlands, Luxembourg and Belgium, and through partnerships with Ristochef in Italy as well as Ãreas and Serunion in Spain, Portugal, Latin America and Morocco.
Zolade clarified that it was the policy of the group to act locally. “We do not intend to export a French model, therefore we give autonomy to each subsidiary,” he said.
The airports sector of Ãreas already surpasses its business in motorway services and rest stops and that is only one of the aspects of growth in the group. The future growth initiatives of Ãreas/Elior are expected to be found in the collective acquisitions of food & beverage and retail companies and the organic growth in those sectors. In the most recent financial report only 35% of Elior turnover was in the concessions business. In this segment Elior operates in Spain through the Serunión subsidiary where it competes with Eurest (Compass Group) and Sodexho.
Elior International boss Gilles Cojan does not rule out more acquisitions to gain market share. The Spanish restaurant market is being consolidated, and since the interest of the group is only focused on quality businesses, there are not many targets left. One niche market in Spain that Elior (with Serunión) has been making inroads into, is the sub-contracting of catering in the military sector, a market said to be worth €100 million per year. With its experience in concession catering at The Louvre and the Museé d’Orsay in Paris, Elior said it is also looking at opportunities in museum restaurants in Spain.
In a separate statement Ãreas president (and 40% shareholder) Emilio Cuatrecasas talked about confronting the issues of rapid change. “The reality of the things teaches us that the world evolves in cycles,” he said. “After a long period of extraordinary economic growth there is always another period of cooling off that compensates the excesses. Sometimes the periods are more long and prolonged, and others can be shorter and marked, but the swaying of the pendulum always occurs.
“The company has doubled its size in only a couple of years. It has been a very intense exercise”¦..We have been dedicating a great deal of effort to negotiate, to integrate and to consolidate a change of dimension,” said Cuatrecasas. “The challenge is to achieve it without losing the values that have characterised and marked the company since its origins.”
