'The Sale of Our Identity' C&A Family Member Discusses Firm's Uncertain Future
They are one of Europe's richest families, and also extremely tight-lipped. With news of the company's potential sale, a member of the Brenninkmeijer family, which owns fashion retailer C&A, has come forward to address the rumors.
Alexander Brenninkmeijer is a member of the fifth generation of one of Europe's richest families. The 50-year-old comes from the Clemens Brenninkmeijer family line on his mother's side and the August Brenninkmeijer line on his father's side of the founders of the European clothing retailer giant C&A in Germany. The retailer was founded in 1841. Today, it has more than 1,500 stores in 18 European countries, making it one of the world's largest fashion apparel retailers, with around 35,000 employees. The family's assets are estimated to exceed more than 20 billion euros. All executive partners in the company are required to be Dutch passport holders and members of the Catholic Church. In mid-January, DER SPIEGEL reported that C&A might be sold to a Chinese investor. Alexander Brenninkmeijer is married and lives in Munich, where he is an entrepreneur.
DER SPIEGEL: Mr. Brenninkmeijer, you're a member of one of Europe's oldest business families. Why do you want to sell C&A, your family's primary business?
Brenninkmeijer: If it was up to me and many other family members, we would surely not sell C&A. We would likely only make such a decision if there were no other sensible alternative.
DER SPIEGEL: What speaks against a sale?
Brenninkmeijer: We Brenninkmeijers don't define ourselves through wealth management companies, but rather through C&A. Through the legacy of our ancestors Clemens and August Brenninkmeijer. When C&A makes headlines, positive or negative, we all have to justify it individually. To our spouses, but also to friends, neighbors and business partners. The sale of C&A would be equivalent to the sale of our very identity. If the current partners are really planning such a step, they'll have to have valid reasons for doing so and they'll have to explain them to us family members.
DER SPIEGEL: Who is currently pushing for the sale?
Brenninkmeijer: Apparently some within the partner structure. I'm not in a position to do so.
DER SPIEGEL: What do you mean by that?
Brenninkmeijer: Even though I am a member of the family, I do not hold a stake in the C&A company. We deal with it differently than other family owned companies. Thus far, we have made decisions according to the so-called "Sneekerkring," or Sneeker Ring, named after the Dutch city Sneek, where our ancestors founded a textile business more than 170 years ago. This ring of decision-makers includes more than 60 partners who control the business interests of C&A. Our company holdings cannot be inherited -- they must be transferred back to the company when we reach old age or if we die prematurely.
DER SPIEGEL: Cofra AG in Switzerland, where all the company shares are held, has neither confirmed nor denied reports about the possible sale, but has instead made rosy comments about new partnerships and possible investments in China. What's your take on that?
Brenninkmeijer: If you look at that statement, it appears that anything is possible. In general, there is quite a bit of talking these days. It didn't used to be like that.
DER SPIEGEL: According to that talk, you were surprised by the plans to sell the comany, weren't you?
Brenninkmeijer: Yes. It was a shock for myself and for all the family members with whom I have spoken. We found out about it, fully unprepared, through the press. You need time to emotionally digest news like that.
DER SPIEGEL: Couldn't you just call up your cousin Maurice Brenninkmeijer, who was CEO of Cofra Holding and headed the Sneekerkring until recently, or his successor Martijn Brenninkmeijer, to ask what's going on?
Brenninkmeijer: Of course, I could. I was long in close contact with Maurice. But it turned out over the years that it is often better to do so in writing. We have cut back on our direct, personal exchange. I also do not believe that he would talk to me about the sale.
DER SPIEGEL: Your family is considered to be extremely tight-lipped. It's only very rarely that a Brenninkmeijer makes a public statement. What is your personal motive for speaking with us now?
Brenninkmeijer: In the past, openness was seen as a sign of weakness in our family. For a long time, and this is probably still the case today, my cousins did not have a relaxed relationship with the press. But it has always been easier for me. The occasion for this interview is, of course, C&A's possible sale. But it's also my wish to set the record straight about one thing or the other that people are reading or hearing about our family.
DER SPIEGEL: Are you worried about negative reactions from within the Brenninkmeijer family?
Brenninkmeijer: With any interview like this, there is always a risk that something won't be conveyed the way you want it to be. But I also believe that most family members view a possible sale the same way that I do. Nevertheless, there are some partners with whom you never know how they will react. Still, a sale of C&A would spell the end of our family's identity. We would probably just wind up being a community of heirs like so many others.
DER SPIEGEL: Industry observers consider the search for external investors to be a logical strategic step. Brick and mortar clothing chains have been in a deep state of crisis for years now. Twenty years ago, C&A was still the market leader in Europe. Today it is struggling to play catch up with competitors like Primark, but particularly with online competitors like Zalando and Amazon.
Brenninkmeijer: I don't know in detail how bad the situation really is at C&A. Perhaps this is a tactical measure by the shareholders with regard to the family members. By painting the worst possible picture, they may be trying to prevent long-term resistance in the event that not all of C&A is sold in the future, but perhaps just part of it.
DER SPIEGEL: Who would stand to gain from a sale?
Brenninkmeijer: Actually no one. The partners aren't permitted to just pocket the sale price. As such, they surely will have considered prior to the sale whether they would be able to reinvest the money they got from C&A more sensibly. That's where the financial profit would lie. But nobody can know what kind of effect a sale would ultimately have on the circle of partners because, in the context of their family ties, they are currently both owners and executives in the family business. Through the sale, many executive positions would be eliminated, perhaps permanently, depending on how the money received in the sale was reinvested. That could lead to the destruction of the current structures and also the disintegration of the family.
DER SPIEGEL: As a simple family member who is not a partner in the company, would you yourself lose wealth if the business were to be sold in its entirety through, for example, the loss of dividends?
Brenninkmeijer: No, because there are no dividends. My siblings and I inherited something from our father Josef, but that's it. That's why things are structured so that the company can't be bled dry by a family that is constantly growing. As such, partners for generations have always exhibited modesty, providing themselves and their children with relatively small payouts they acquired as partners. After leaving as a partner, most of the shares are given back to the company. That's how my father, who has since passed away, and many others handled it. Against the backdrop, a sale would be breaking with past generations. That's also why the partners have a duty to care for the other family members.
DER SPIEGEL: Do you have the feeling that the current partners are living up that duty?
Brenninkmeijer: The partners are currently seeking to increasingly release themselves from this responsibility.
DER SPIEGEL: There is concrete talk of Chinese investors. How does that jibe with your family's strict Catholic traditions?
Brenninkmeijer: It doesn't really. But if the statement from Cofra Holding AG about the intended sale, that such a sale or any other form of cooperation would only be executed with Catholics, people would have laughed at us.
DER SPIEGEL: But familial tradition is nevertheless a central theme for you. What is it that makes the Brenninkmeijers and C&A so special?
Brenninkmeijer: Thus far, there has always been something special about the way people treated each other and the rules that were obeyed. And of course, the Catholic faith played a major role. Our meetings in Mettingen, the hometown of our ancestors, and the get-togethers we celebrated there show us again and again what values we share. Integrity, for example.
DER SPIEGEL: At the same time, you could also look at some family values as being rather outdated. Until a few years ago, for example, all female descendants in the family were excluded from pursuing careers inside the company.
Brenninkmeijer: We could talk for hours about this inequity. It may even have led to the problems that we are now confronted with. My personal experience is that many women in the Brenninkmeijer family are particularly smart and talented. Many have a lot more going on upstairs than their brothers or cousins, who were obviously able to establish careers within the company as a matter of course, allowing them to increase their wealth. I consider that to be unfair.
DER SPIEGEL: A sale of C&A, the main business, would be a major break from your family history, but it would also have consequences for tens of thousands of employees around the world. What responsibility do you carry for these people?
Brenninkmeijer: As I said, I am not a partner and, as such, cannot carry any responsibility for C&A's employees. But in earlier days, the Brenninkmeijer family demanded quite a lot of many of their employees. For example, employees in management positions were until recently not allowed to divorce -- at least not without first consulting with the partners. If you make special demands, then you also have a special responsibility. I don't know whether it is still that way today. If selling is the right business decision, then that will also apply to employees because the sale will then serve to save jobs.
DER SPIEGEL: Do family owned companies have a special mission?
Brenninkmeijer: "Mission" is an exaggeration. We're talking about a comparison between family businesses and other companies that are held by investors. As such, the differences should be sought in how the companies are run. And that's where they can be found, in my opinion, because for everyone, especially for employees and customers, there is a difference if there is still someone who personally champions the company's activities and also takes responsibility for them. And, of course, you can't forget the family behind the family company, because it is defined through the achievements of the company but also because the family's lifestyle has an influence on how the company's achievements are perceived.
DER SPIEGEL: Do these values still apply today?
Brenninkmeijer: I actually believe they are growing in importance.
DER SPIEGEL: Your family is large, now including more than 1,000 members. Who do you think belongs to the family.
Brenninkmeijer: For me, that includes everyone who shares the fundamental view that consensus and sticking together are important commodities in the Brenninkmeijer family. But I have to admit that this definition isn't viable in practice because you'd first have to conduct a test of people's attitudes. Surely a definition formulated by the inner circle of partners, one that reaches as far as the great grandchildren, makes more sense from a practical standpoint.
DER SPIEGEL: You also took your first steps in your career at the family business. But at 27 years of age, you grew a full beard -- which was allegedly banned at C&A at the time -- and abandoned this predefined path. Why?
Brenninkmeijer: At the time, I already had other ideas for the company's future. I also left because I realized that there wasn't really any chance of implementing those ideas. At the time, I was already starting to see that the mutual support between the members of our family working within the company was waning and that people weren't being honest with each other. It's not enough to constantly preach harmony -- you also have to practice what you preach.
DER SPIEGEL: You've experienced what it can be like when such a powerful family turns against one of their own. You became self-employed with your fashion label Clemens en August in 2004. At the time, you said in an interview with SPIEGEL ONLINE that your family had given you their blessing to start the company. Only a short time later, though, a bitter legal dispute broke out over the rights to the name.
Brenninkmeijer: Yes, that was completely irrational and unforeseeable to me. I received a letter from the partner responsible for negotiating with me in which he basically wished me luck with my new label and even expressed the hope that I might one day want to sell it to the partners. I thought that letter had settled everything.
DER SPIEGEL: What happened then?
Brenninkmeijer: A few weeks after the interview, I was totally surprised to receive a written warning from the shareholders through a Swiss attorney. I immediately contacted the responsible partner. It turned out that during negotiations with me, my cousins had secretly registered my label, Clemens en August, almost worldwise in an effort to block me.
DER SPIEGEL: What was the point of doing so?
Brenninkmeijer: They wanted to prevent me from being able to continue with my label. If they had been successful, it would have led to ruin for both my company and me.
DER SPIEGEL: How did the dispute end?
Brenninkmeijer: I won all the court cases. And I reached a deal with my cousins securing the sole rights for the use of the brand name Clemens en August for the rest of my life and, thereafter, for my children.
DER SPIEGEL: Would a possible sale of C&A also jeopardize your personal businesses?
Brenninkmeijer: It is certainly true at the moment that the rumors are creating considerable difficulties in my talks with investors, because it's not clear to all that I hold the exclusive rights to the brand and that the label would not be affected by a possible sale of C&A.
DER SPIEGEL: What happened after the lawsuits? Were you persona non-grata?
Brenninkmeijer: No, not that. But after this rift, it was clear to me that we couldn't just meet up again in Mettingen as if nothing had happened.
DER SPIEGEL: What do you mean by that specifically?
Brenninkmeijer: I made clear to the members of the Sneekerkring that if they wanted to make peace, then they could have it. But I also made it my goal to make sure that nothing like that could happen again to a normal family member. I will make sure of that.
DER SPIEGEL: How had such disputes been handled before?
Brenninkmeijer: The shareholders always told you what you had to do.
DER SPIEGEL: And that no longer applies today?
Brenninkmeijer: No. That's a thing of the past. I reached a settlement in the course of my legal disputes that stipulates the creation of an internal family arbitration process. We call it the Brenninkmeijer Panel.
DER SPIEGEL: And how does this internal family arbitration board function?
Brenninkmeijer: Arbitration board is also what my cousin Maurice called it. But it is much more than that, and in that regard I want to set the record straight. The Brenninkmeijer Panel is a permanent conflict resolution panel that is engaged as a mediator, one that can make binding or nonbinding decisions. It is comprised of at least five independent and unimpeachable members who are usually lawyers. These judges aren't allowed to have any involvement with the family.
DER SPIEGEL: Who appoints these family judges?
Brenninkmeijer: I named them together with the circle of partners. We reached a contractual agreement about this. There's a neutral office that every member of the family can turn to. The entire procedure has to be conducted in a fully transparent way. There's a comprehensive set of rules. I have summarized every detail in a book that is around 100 pages in length and in three languages. All family members are required to adhere to these rules, including the partners and, of course, the external judges.
DER SPIEGEL: So, you've agreed on your own set of Brenninkmeijer laws?
Brenninkmeijer: A familial administration of justice.
DER SPIEGEL: That also seems to fit with your family's idiosyncratic traditions.
Brenninkmeijer: That may be the way you see it. I have spent almost 10 years working on this set of rules with experts so that the panel has the potential of gaining the trust of all family members. The aim is to open up the possibility for every Brenninkmeijer, regardless whether man or woman, regardless whether a partner or not, to assert their claims and to scrutinize things that might be going wrong. And once the panel has established itself within our family, which I fervently hope will happen, it could also provide an example for other family-owned companies.
DER SPIEGEL: Has it worked so far?
Brenninkmeijer: A panel like that can only bring peace if people mean it seriously. It can't be a placebo, because there's also the risk that a conflict resolution panel could ultimately also have the opposite effect.
DER SPIEGEL: Has the panel made any decisions yet?
Brenninkmeijer: Yes. For example, the panel determined that the expulsion of a partner from the inner circle because of a divorce was wrongful and likely against the law.
DER SPIEGEL: That's is a complete break from one of your strictest family rules, which have been strongly shaped by Catholicism. Previously, all family members had to leave the inner circle of partners after a divorce.
Brenninkmeijer: Exactly. The panel made a clear judgment about that this and that cannot be concealed from family members.
DER SPIEGEL: According to that logic, would a sale of C&A not also be a potential case for the family arbitration board?
Brenninkmeijer: The panel is categorically excluded from responsibility for company policies. But if all of the partners were to move outside the structures prescribed by the founding fathers, out of self-interest, for example, it could definitely be a case for the panel. But the panel itself would ultimately also decide on that. And there would first have to be a complainant.
DER SPIEGEL: But with a potential sale this massive in scale, isn't there definitely a threat that the current partners who are actively involved could want to make money off it?
Brenninkmeijer: That would go against every tradition. I want to make clear here once again that I would not be fundamentally opposed to a sale if that were the only correct decision. I don't, after all, know the company's current situation in detail. But I am of the opinion that something this existential to the family also needs to be questioned. Indeed, has to be questioned.
DER SPIEGEL: Mr. Brenninkmeijer, we thank you for this interview.