France: The Incredible Discounter GiFi Success Story

Nothing predestined Philippe Ginestet, owner of discount non-food retail chain GiFi, to make a fortune. From cattle seller, he became one of the most powerful bosses in mass distribution. Back on the odyssey of Philippe Ginestet, a self-taught entrepreneur who seems to be successful.

Philippe Ginestet: I did not study. Coming from a family of horse traders, I started working very early. From the age of 12, I accompanied my parents to the markets, it was my first real school. My father taught me one very important thing: keep your word. At the time, we didn't sign a contract and we only worked on negotiation. A clap in the hand was enough to close a deal. When I left school in the third grade, my parents were very disappointed and no longer believed in me. It triggered something in me. I then gave myself a goal that has always remained the purpose of my business: to amaze. I wanted to amaze my parents by succeeding. So I went to Normandy to join a large livestock cooperative, for which I cleaned the trucks and the stables. I liked the job, but I had to prove that I was capable of doing something else. Soon after, I was in the markets and my bosses trusted me. One day, while my boss was giving me a misconduct warning, I quit on a whim. I found myself without a job, without a penny and without a car. Fifteen days later, I hitchhiked to Paris because I knew that I could find work there through temporary employment agencies. I spent my first night in a metro and the next day I was a sweeper at Motor Bernard. Shortly thereafter, I was hired at Electrolux as a commission-paid representative. After two weeks of training I was sent to the field, but after three weeks I had not made any sales. As I was about to be fired, an experienced representative decided to take me under his wing in his little shop in Nanterre. I just watched him work and could not help but see that he was a great salesperson. He was not doing anything that I had learned during the training. He spoke naturally and simply, but most of all, he believed in his product. So I started with this new approach and started making sales. After three months, the one Electrolux wanted to fire came in second out of forty. Two years later, I was received by the CEO of Electrolux in Sweden as the best seller in France. While we were asked between 12 and 15 unit sales per month, I made up to 100. Something exceptional was happening: at the Carrefour de Montesson, a lady passed by and noticed the vacuum cleaners while I was putting away my shopping in the trunk. Very interested, she asks me where to get some bags. I delivered it to her and on the spot I also sold her a vacuum cleaner. The following week in that parking lot, I was hoping the same would happen. I closed and then reopened the trunk of my car about ten times until someone stopped. The next day, I went back. As long as I didn't have an address, I would reopen and close the safe. After eight days, the manager of the hypermarket comes to see me and offers to rent a space in front of his checkouts. I then set up my carpet and spread out my vacuum cleaners. At 22, I had become a good salesperson. What I learned was that you always have to listen, to know what to say to capture the attention of the person who is interested in you. At Electrolux, I met my fiancee, then I left the company in the same way I left the business in Normandy a few years earlier. Then came another stage in my life as a salesperson. I would go to the car auction every Tuesday, where I would buy a car or two, to clean them up and sell them with a profit. The process worked, until this little 4L van that I never managed to sell. It was then that I remembered that my brother-in-law was storing a stack of sweaters that he thought he would sell to a gypsy merchant for three cents. I took my van and loaded it with sweaters. I bought two camp beds and an umbrella and without declaring myself immediately, I established myself at the foot of the building where I lived in Franconville. I sold for 800 francs. The next day, I moved to the Nanterre market and sold for 3300 francs. I quickly understood that there was even better than the markets: clearance sales, very popular in France. You had to be in the stand during the day, and at night sometimes drive 500 kilometers to get to other clearance sales. I bought a nice Mercedes truck with which we dragged the trailer. I had really become a gypsy. We lived with our newborn in the caravan, on the roads of the French clearance sales. It lasted three years, we were happy, until my son's school age arrived. We had to make a decision, a new turn ... and made the choice to stabilize. We then decided to open a shop in Villeneuve-sur-Lot. I wanted the best possible location. As I could not afford the city center, on the road to Agen, I found a room to rent of 300 m2 for 4,400 francs rent. I didn't even know what I was going to sell there but I took it right away. As I walked through the markets and the flea markets, I noticed that what was selling the best were the useful objects: textiles or even household linen. I decided to put everything in it. I inquired about a wholesale center in Aubervilliers where I could buy this type of merchandise. This is how I opened the first store in Villeneuve-sur-Lot. It is 1981, and a name had to be found for this new store. I knew that the word “discount” tended to attract people, I had to integrate it: Philippe's “Fi”, Ginestet's “Gi”, and that gave GiFi the discount store. As the publicity had to make an impression, I decided to “GiFi the real discount”. After finding the name and logo, it was time to advertise and it was to free newspapers that I turned. The next step was to open a second, bigger store, which performed better than the first. The third store opened in Sarlat in a 1,200 m2 premises, which also performed very well. An opportunity then arose in Bordeaux for 800 m2. My wife held the first, my mother the second and my godmother the third, and I didn't know how I was going to make the fourth work. As the publicity had to make an impression, I decided to “GiFi the real discount”. Was it necessary to work with family? Until then, yes. But I had to start recruiting. I discovered a new world. I really enjoyed working with people. After the fifth store opened, we made a decision with my wife: we have five stores, we are rich and happy with our son, so we stop there. This decision was only short-lived as a month later, an overly attractive opportunity presented itself. I could have two large stores in Pau and Tarbes for only 600,000 francs. At that point, I accepted without knowing how I was going to pay. The banker who gave me the loan to finance the premises believed in me, and he was right. We are then in 1986 and I continue to open stores with new collaborators. I had a leitmotif. As the son of a horse dealer, I always wanted to buy at the right price, by avoiding middlemen and going through importers. Until the day I decided to go directly to the factories in Italy and Spain. The next step was Asia. I then thought to myself: “Why shouldn't I go to Asia? I decided to go there, knowing that I didn't speak a word of Mandarin or English. I hired a translator with whom I carried out all the group's business in Asia.

The year 1988 was an important year for the company. This is where the Ginestet group, GPG, was born. In 1996, I became fully aware of the value of the company when I was approached by financiers with whom I partnered in the form of an LBO. Together, we had the objective of listing the company on the stock market, which was done in February 2005. Only then, a month later, it was the stock market crash that lowered the group's rating by 70%. There, I thought of all the people who had invested, who had believed in it, and who were losing. I said to myself: "The misfortune of failure, we must make it a success. Starting from this premise, I began to redeem. In 2011, failing to respect the rigor of the stock market, the company broke away from it and became a 100% family business again. In 2016, GiFi had no more debts and a proposal was offered to me: to take over Tati. I know it's dangerous ground because the last 15 years have been very complicated for them, but I remembered the 80s, when everyone was talking about Tati, and I had the opportunity to buy this legendary brand. What I saw was that 1,500 people were going to be unemployed. My competitors on the Tati file joined together to create a consortium against me, discrediting my actions in the press. It motivated me even more, I wanted to prove that I could go to the end and that I really wanted to save these jobs. We won the case. I wanted to prove that I could go to the end and that I really wanted to save these jobs. We won the case. I wanted to prove that I could go to the end and that I really wanted to save these jobs. We won the case. What lessons have you learned from your failures? Failure is what builds a man. You have to know failure in your life. I had one, but Tati's takeover was not. Finally, I experienced my failures at the best time of my life. In 2005, we needed to open a second depot in the north of France. We then had about 300 stores, I hired a service provider to take care of it. He let us down and the goods got stuck and the stores in the North were not delivered. All this unbalanced society and caused us to lose a lot of numbers. I suffered a second failure. At the same time, I had taken over a small textile company and created another brand. The idea was very good, but I realized that I could not be on all fronts. I had to solve the group's problems before I spread out on the market. The openings of this new brand had to be canceled. This is one of my biggest failures. The idea that was needed? Make this failure a chance. It is this kind of event which provokes a questioning and which allows to see things from another angle. It was a beautiful lesson in life. I understood after that that, when you invest, you always have to plan for the unexpected and have a plan B.

For Tati, I had a double objective. Save the 1,500 employees, but also the brand. I did not succeed. Obviously, there were closed stores and a hundred layoffs, but we created a lot of jobs by reopening all these stores under the GiFi banner. I always have in mind to protect the interests of the company, but I also know how to put myself in the shoes of the collaborators. It's easy to hire, but harder to spot talent. Once found, you have to know how to support them in the business. The strength of a leader lies in listening to and understanding his collaborators. This spirit and this corporate culture have always been present since the creation of the first store in 1981. What made the strength of my company is that I fell in love with my employees. Today, How do you cultivate this closeness with your employees? It's quite simple, showing that I love them. When I started, I privatized a nightclub to celebrate New Year's Day with my teams at La Mongie. We reserved a few rooms and settled on mattresses on the floor. I always stayed with my collaborators, I also organize many seminars for up to 500 people in Morocco, Mauritius, or in Las Vegas. 12 weeks a year, with my wife, we receive around 600 employees in Megève for motivational seminars bringing together around fifty people each time. When they forget that I am their president, it is a satisfaction for me. I take a lot of time to meet with the managers of each store and to discuss each one's goals and issues. Proximity with employees is important, regardless of the workforce. It was when I visited all the GiFi stores that I understood the extent of what I had created. I don't live for financial charts. I take care of my staff, and it's always a pleasure. I am very proud to have made this passion for teams the cement of the entire Gifi management team. What has been your investment strategy throughout your career? All my investments are strategic. I don't want to confine myself to one sector of activity, and that allows me to make great encounters. Our investments are all aimed at the sustainability and independence of our GPG group. Today we have about fifteen participations in digital, data, entertainment and health. Our investments cultivate a close bond with our clients. For example, I took over Mességué laboratories because I am a lover of nature and I firmly believed in their products. I also invested in advertising on the telephone, a market that we dominate today. I have always wanted to amaze, and this also applies to my investments, like VieConnect, a Toulouse start-up which works with nursing homes on incontinence issues. At the request of the Lot-et-Garonne region, I also took over an old castle to turn it into the Stelsia, a 4* hotel and its Michelin-starred restaurant, which has become an essential address in the South-West. In a few years, I have created a truly unique ecosystem in its distribution; I always invest in people because for me, any business is above all a human adventure.


See here for more: https://www.forbes.fr/entrepreneurs/philippe-ginestet-lincroyable-success-story/


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