The De Clerk Family of Belgium to Create New Joint Industry Group

Letter of Intent Signed, Aims to Consolidate Europe's Carpet Industry

by Jan Hoffman

June 28, 2005

MENEN, Belgium — On Friday June 10, various members of the Belgian De Clerck family have signed a statement of intent and are currently conducting negotiations to set up a new joint industry group. As of June 30, the agreement has been realized.

The negotiating partners are Stephan Colle of Beaulieu Kruishoutem, Dominiek De Clerck of Ter Lembeek International, Francis De Clerck of IDEAL Group, Luc De Clerck of Berry Floor Group and Roger De Clerck of Beaulieu Kunststoffen.

"The reasons behind this prospective partnership are to be found in the ongoing globalization of the world economy and the fact that joining forces offers added weight and strength as new challenges are faced in a broader world market," said spokesman Christophe Deroose, CFO and communications manager. "The family seeks to lead the way in making the first step in the imperative consolidation of the carpet industry in Europe. This should happen in the footsteps of what has been a successful consolidation of this industry in the U.S. a number of years ago."

"The market hasn't grown for years and the competition, mainly from China and Turkey, is tough. A big factor in the waning success of carpets is laminates. In only ten years time, laminates have conquered no less than eight percent of the world market," Deroose said.

The first question that comes to mind is of course why two of the seven family members (Jan De Clerck of Domo and Mieke De Clerck of Beaulieu of America) are not present in the consolidation move, which is co-signed by father Roger De Clerck, who in 1991 divided his empire, the former Beaulieu Group, into six parts. Here, De Roose only wants to state that this is an internal affair that concerns solely the family.

It is not clear if the consolidation will imply job losses. Together, the four family members employ around 7,500 people, 4,800 of whom work in Belgium. The new group would realize an annual turnover of 1.73 billion euro and would link up 80 plants in 10 different countries.

"It's too early to say if jobs will be lost," Deroose replied. "This is something that will only become clear later on during the negotiations. And don't forget, there's also the Competition Board, which has to give its approval."

''What's obvious is that bringing together all of these companies is of vital importance if we want to remain a key player. There's no doubt about it—financially speaking, one large group is the ideal solution because it has more impact and thus can buy raw materials at a cheaper price and at the same time cut cost," Deroose said.

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