CAFOM analysis
Niche retail and E-commerce
Cafom is a French small cap with two businesses that dominate two niches. The full name is “Centrale d'achat française pour l'Outre-mer”.
The first niche is furniture e-commerce in Europe, with vente-unique.com.
The second niche is home furnishing and appliances retail in the French overseas territories. What is that, some of you may ask?
The red circles..that is France. Some of them are deserted. The rest represent 2.8 million people and growing. Looking at the map, you can easily imagine that they are isolated areas retail wise, isolated from roads and rail, and they do not get amazon 24 hours delivery!
History
This is a company of an exceptional founder. Often you read this when there is a company write-up, but what he did is very ambitious.
Hervé Giaoui is a Tunisian who left Tunisia at 18. He joined a catering school in the South of France. Then he drops out or fails, It’s unclear.
That is not a problem for him. With two partners, he has a crazy business plan, decides to go to guadeloupe (here) to…
…sell Japanese Hi-Fi door to door.
The North African jews have a reputation to be very good salesmen and ambitious entrepreneurs. Maybe it’s because of a famous french comedy about the textile producers in Paris (“La verité si je ments”).
Guadeloupe was a strange plan. But it worked. They added furniture, and in 1985 finally won the right to have franchises for the French chain BUT.
In 1986, Cafom opened more shops, expanded to French Guyana
In the later years, Cafom expanded to other territories and opened warehouses.
in 2005 CAFOM entered the Paris stock exchange.
in 2006, he saw the internet as a good opportunity so he created Vente-Unique, a website to sell furniture online in France.
At this stage, he is still based in the Caribbean Antilles, he never had an operation in mainland France, and never had an ecommerce experience. Nevermind, he will attack this market. People told him that he does not know the internet, that in France there is more competition than in the Islands, that it’s for the big boys.
That is his mindset;
“ People try to discourage you. When I started selling TVs door-to-door in the 70s, I was told it was another job and 99% of my friends laughed. I didn't know how to do marketing, so I got into it. Same for the internet when I created Vente-unique”
and..He won this market and Vente-unique is now profitable and listed.
in 2011, he bought the habitat Europe furniture brand and it’s shops. This was actually an error and it was sold in 2022. This was a turnaround, unprofitable and the company failed to turn it around. This cost the company a lot and hurt the net income for many years.
2018: Vente-Unique was IPOed but remained partially owned by CAFOM (63%).
In the mean time, the company opened each year a few stores in the overseas departments.
Apart from the Habitat costly mistake, the history is very good.
On to business overview:
The rest of the analysis is for supporters of my work. Remember, there is a referral program also to get access.
My next company analysis will be a fully free article, maybe on a new company, or a company I own.