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'Family communism': The Mulliez family business model By Vanessa
Schneider Published on July 14, 2022, at 12:30 pm (Paris), updated on
July 25,
2022, at 1:54 pm Time to 15 min.
Lire en français Subscribers only Investigation|'Successions' (Season 1, 2/5). The large entrepreneurial Mulliez family owns prosperous French
brands such as Auchan, Leroy Merlin and Decathlon. Likened by some to a 'cult,' it has cultivated the art of secrecy for 70 years.
Season 1 of "Successions" was originally published in French in the
summer of 2021. Season 2 will be published in French and English as part
of our 2022 Summer Reads.
The office building is like hundreds of thousands of others, with bland facades and a modern construction, nestled somewhere in the city
outskirts. It is located on Boulevard de Cambrai, in Roubaix, and houses
the headquarters of the Mulliez Family Association (AFM), one of the wealthiest families in France. And one of the most secretive, too. No
one knows the names or faces of the Mulliez family members. For nearly
70 years, generation after generation, they strove to remain invisible, hidden from view and shielded from curiosity, spawning illusions and speculation. Their motto is "Noise doesn't do any good, and goodness
doesn't make any noise."
While the group members conceal themselves, their products have invaded
daily life and their stores adorn the landscape like familiar landmarks. Auchan, Leroy Merlin, Boulanger, Decathlon, Kiabi, Pimkie, Norauto,
Flunch... a large part of what the French regularly consume belongs to
the Mulliez dynasty. It is a business empire encompassing some 130
brands or chains and employing around 700,000 people worldwide, with a combined turnover of nearly 100 billion euros every year.
The Mulliez venture is both a spectacular success story and a masterfully-managed succession. The descendants of wool manufacturer
Louis Mulliez (1877-1952), a devout Catholic, now number 1,400, among
whom 800 are members of the AFM. In some branches of the family
business, five generations have already succeeded one another. The
Mulliez have managed to disprove the curse that plagues family
capitalism: "The first generation creates, the second manages and the
third kills." The key to their success lies in a unique business model
that allows for both the safeguarding of family legacies and family
ties. It is a well-oiled machine, which the family has agreed to talk
about for the first time.
The inner sanctum After several weeks of silence, refusals and
discussions, we were welcomed into the inner sanctum by Barthélémy Guislain, a tall, tanned man with a candid look and a rough voice. He is
the head of the powerful AFM, a partnership of cousins without legal
basis that looks after the interests of family shareholders. At 48, this "added value" to the family – he is married to a Mulliez – has followed the typical career path cherished and valued by the family. He started
at the bottom of the ladder, gradually climbed the ranks and went from
being store manager to chairman of the AFM board of directors, and
ultimately creating his own company, Kbane.
Barthélémy Guislain embodies a new generation, one that guarantees effective business performance and family unity while being a tad less overcautious than their predecessors. "This is the first time a
journalist has ever set foot here," he said, in a nonetheless wary tone, before leading us into a vast room.
The decor is Spartan, with squares of industrial carpet on the floor,
neon lights on the ceiling, and a collection of laminated wooden tables
and black and blue plastic chairs as furniture. No cozy sofas or
designer furniture here, no paintings on the walls or plasma screens,
only a few family photos – hundreds of faces – and an old flip chart where diagrams have been scribbled with a large felt-tip pen.

When the patriarch died in 1952, the sons decided to "do better collectively rather than succeed individually," another of their mottos
that has become a favorite

"This is the meeting place of the family's board of directors," said Guislain, observing us out of the corner of his eye with a little smile. Serving us plain water in paper cups, he added, "It's much less
luxurious than among the CAC 40 (the French stock market index),
wouldn't you say?" At least, from what he knows of it, because the
renowned families he mentioned – Arnault, Pinault, Bolloré or even Lagardère – well, he doesn't mix with them. "They're not our kind of people."
Read more Article réservé à nos abonnés The Arnault clan and its factory of heirs The Mulliez empire – currently comprising multiple independent companies, but whose common shareholder is the family – originated in a textile company located in Roubaix, a stone's throw from Bernard
Arnault's family, in this city renowned for its dynasties of wool entrepreneurs. In the early 1950s, the Mulliez anticipated changes in
the sector and landed on the brilliant idea of creating their own brand
of franchised stores, Phildar, disseminated throughout France.
When the patriarch died in 1952, his 11 children reflected about the
future of the family business, which had 1,800 employees at the time.
They were advised to divide the property among themselves, but the sons decided to "do better collectively rather than succeed individually" – another of their mottos that has become a favorite. At a seminar held in Ostend, Belgium in 1955, they laid the parameters underlying the AFM's foundation, whose charter was inspired by the social doctrine of the
Church, formalized by Pope Leo XIII in 1891.
The AFM is a shareholders' agreement governed by two principles. The
first stipulates that only the descendants of Louis and Marguerite Mulliez-Lestienne are authorized to hold shares in the family's
companies and, in order to avoid outside predators, they are not allowed
to sell them to third parties. An internal "stock exchange" opens every
year in July and allows the cousins to buy or sell shares. A buyback
fund was created to compensate for any overly large transactions.
Elected every four years, the family management team has a right of veto
on the sale and buyback of shares. Inheritance is thereby protected and everything is in place to prevent a greedy cousin from becoming
all-powerful.
The second founding principle of AFM rests in the structure of a true "shareholder communism": the brothers agreed to put everything into a communal pot, both shares of existing companies as well as future ones.
This rule of "all in all" (meaning every member having a say in every
aspect of the business) sealed the deal, binding everyone into a
fail-safe solidarity. A gilded prison, if you will, allowing for a
smooth succession.
1960s: the beginning of the golden age In 1964, the brothers decided to include their four sisters as partners in the ownership. Rather than
stemming from some feminist impulse, this decision originated from a
need for efficiency – the women needed to be endowed and the dowries required selling assets. Later on, spouses were also accepted into the partnership, also out of pragmatism. After all,
there is nothing like having two shareholder parents to train future
heirs to pass on wealth and values under ideal conditions. "The spouses
are a very important element; they are linked but in a detached way,"
said Barthélémy Guislain, before quoting another family maxim: "numbers make strength." In case of divorce, the spouses are kindly asked to hand
back their shares.
In the 1960s, during the textile crisis, the grandchildren of Louis
Mulliez diversified their trade. The golden age was dawning. Gonzague
Mulliez founded Saint-Maclou in 1963, and one of his cousins, Gérard,
set up supermarket chain Auchan a year later using a family loan. The following decades saw the emergence of other brands: Kiabi, Norauto, Decathlon, Boulanger and Leroy Merlin.
The Mulliez have been able to directly influence consumer behavior by investing in well-located parking lots acquired at low cost in
fast-growing commercial zones, enabling French shoppers to stock up on everything they need from the company's stores in just a few hours.
Today, via Creadev, the family's investment company, they have
diversified into multiple sectors, such as retirement homes with Maisons
de Famille (family homes), or renewable energy with Voltalia.
Maintaining cohesion as the family continues to expand is an issue that obsesses the Mulliez family. Their tightly knit organization protects
them from the risks of dislocation, with a complex legal structure and systems that allow for tax optimization, in addition to incentives that encourage everyone to stay on board. They have also created an efficient governance system: each company is managed by a tandem, an externally recruited general manager and a non-executive chairman, usually a
cousin, who keeps an eye on things and ensures that fundamental values
are respected. There are 150 of them on the 200 or so boards of
directors.
Sometimes described as a "sect," the family has its own vocabulary,
rites, mottos and codes that are passed down through the generations.
The Mulliez think of themselves not so much as a group but an
"ecosystem;" where spouses are not "spare parts" but "added values" and
heirs are "family."
On paper, everyone is free to live their lives as they see fit. "If we
close the cage, the birds only have one desire, which is to leave. If
you leave it open, they can go out for a while but always come back,"
said Antoine Mayaud, the former president of the "affectio societatis" ("attachment to the company") commission responsible for ensuring the preservation of the family bond. "Freedom is the best way to secure
loyalty."
Barthélémy Guislain, who heads the Mulliez Family Association (AFM), and Gérard Mulliez, founder of the Auchan retail group, on July 17, 2017, at
the inauguration of the Promenade de Flandres, the first cross-border shopping center between France and Belgium.
Barthélémy Guislain, who heads the Mulliez Family Association (AFM), and Gérard Mulliez, founder of the Auchan retail group, on July 17, 2017, at
the inauguration of the Promenade de Flandres, the first cross-border shopping center between France and Belgium. FRANCK CRUSIAUX/REA
Consequently, membership of the AFM is neither mandatory nor automatic.
The goal is to welcome shareholders eager to become involved.
Prospective candidates must be 20 years old to apply for membership, and attend a three-day training course to acquire the basics of the empire's functioning as well as the essentials of economics, management and
finance. At the end of the initiation weekend, new members are brought
on board during a general assembly and receive a heartfelt applause from
all the cousins. It is a rite of passage that is invariably, for each of
the Mulliez interviewed, "a truly emotional time."
Choosing nephews over sons Assuming positions of responsibility,
however, is more difficult.
Completing initiation does not automatically unlock access to the top,
and members must prove themselves in order to move up the ladder and
become entrusted with management roles. Nothing is left to chance in the quest for optimizing governance and preserving unity. To this end,
fathers are advised not to choose their sons to succeed them. After all,
an angry progeny might be tempted to scuttle a company in order to "metaphorically kill the father," while one who has complete admiration
might not dare make needed changes for fear of spoiling his father's
work. "Nothing grows in the shade of the great oaks except acorns,"
according to another beloved motto of the Mulliez, decidedly funny.
"If the values are not transmitted, if the fundamentals are not anchored
in the heart and soul of the successors, there is a risk of collapse in
the third or fourth generation," said Gérard Mulliez to the magazine
Enjeux in 2003. Among the cardinal values particularly dear to the
family are those that help sustain an appetite for entrepreneurship
while still encouraging the healthiest possible relationship with money.
"If you give your child a Porsche or a boat, how do you teach him the
value of hard work?" said a cousin.
"We have implicit rules," said another, Fabien Derville, 58, father of
four children and chairman of the boards of Mobivia and Decathlon. "Live
on your salary, don't throw money out the window, go into debt for a
primary residence but not a second home and make sure your child is
working, in real life, so he will have less time to waste."
No chauffeurs or private jets "Money is like blood," goes another house motto. In other words, it must circulate and benefit the whole organism.
In Roubaix, there is no superfluous spending: the building has no
kitchen, lunches are served on trays, caterers are banned and
restaurants are reserved for special occasions only. In this area of
Northern France where a large part of the family still lives, the millionaires do not have chauffeurs, the president travels by commercial plane, and no one even contemplates owning a private jet. "That kind of lifestyle isn't for us," said Barthélémy Guislain. "It's useful; we are
not disconnected from worldly life and maintain a proximity to things
and people."
One particular anecdote about a visiting Dassault heir is still vivid in
the minds of all. When one of the Mulliez cousins offered to walk him to
the metro, he exclaimed, "But I've never been on public transport
before!" "Well, there is a first time to everything," said the cousin, slipping a train ticket into his hand and ushering him towards the
platform.
Among the Mulliez family, there are one or two castles, a few beautiful secondary homes that cannot be seen from the street and houses with
swimming pools, some of which are tucked away in Nechin, Belgium, just
across the border, where the tax system is quite attractive. But for
most of the 1400 members of the clan, a penny is still a penny and it's
not their style to show off. Moreover, it would be unthinkable to
squander the inheritance built up by the elders. One more maxim sums it
all up: "We are here to serve, not to serve ourselves."
Among these Northern Catholics practicing a decidedly Protestant
discipline, there are no jet-setters, no champagne fountains or
nightclubs, no glittery affairs with models or actresses. The vast
majority of cousins get around on public transport (never in first
class), shop in the group's stores and wear its brands. Thrifty, though
some scoff that it's "stingy." "Frugal," said Barthé, as his family nicknamed him. There are indeed a few high rollers – about 30, closely monitored by the cousins – who fear more than anything else the "Bahamas syndrome": becoming the prototypical heir with a cigar hanging from the
lips, squandering the family inheritance.

Money is scary, and finance is even scarier. The cousins have sworn
they will never go public on the stock market, the "cancer of the
world," as Gérard Mulliez used to say.

The younger generations still remember with a sense of dread the
helicopter that Franky Mulliez, the founder of Kiloutou, used to travel
at great expense to his castle in Dordogne, in southwest France. Money
is scary, and finance is even scarier. The cousins have sworn they will
never go public on the stock market, the "cancer of the world," as
Gérard Mulliez used to say. Yet all remain convinced that the search and maximization of profit are essential, and they also acknowledge that the numbers won't stay favorable over the long run without a proper
agreement in place. "Doing business as a family is unnatural," said
Antoine Mayaud, who has long been a pillar of AFM's management board.
"To successfully reconcile the irreconcilable, you have to strengthen
ties and appreciate each other."
Although no one knew about it, the family enterprise almost collapsed in 1992. The elders were openly concerned at the time about their
descendants' potential inability to ensure the unity and continuity of
all company activities. Pointing to the immense scale of the empire,
they contemplated the idea of selling or dividing the assets branch by branch.
About 15 young rebels were opposed to it, among them Antoine Mayaud, 68
years old today. A Mulliez through his mother, he had long held a poor opinion of the family group, whom he blamed for having humiliated his
father, whose family religious jewelry business had gone bankrupt. He
vowed never to work in such a suffocating environment, but after 25
years spent in external companies, notably at Danone, he went back on
his promise.
Protection against the risk of separation When he and his rebelling
comrades stood up to the family's leadership,
the elders gave them a year to convince them to stay unified. They were
even allocated a working budget for finding an answer to the burning questions: "Why stay together? For whom? To go where?" At the next
general meeting, they had five minutes to defend their point of view.
"We stood up and said we wanted to continue our parents' adventure," he
said. We were applauded by the very people who had been skeptical; it
was as if they had wanted to give us a challenge, that we gladly took
on."
Since the near catastrophe of 1992, the new generation has assembled a toolkit of sorts to protect itself from the risk of separation and make
"the family of blood a family of meaning," according to another of their expressions. It has equipped itself with a highly developed internal
social network that allows each member, whether a doctor, teacher,
student or employed by one of the branches of the company, to follow the latest news and meetings.
Every seven years, a 20-year strategic vision exercise takes place, open
to all. Volunteers work for a year, meeting with philosophers,
politicians, sociologists, economists, company bosses and competitors,
aiming to remember who they are and answer the age-old question: "Why do
we stay together, and for what purpose?" "It is a conscious and engaging
act of faith," said Barthélémy Guislain. A seed of democracy was put in place with the recognition of opposition groups, such as the "AFM Environment," which disagrees with the excessive use of concrete and the hyperconsumerism encouraged by the founders.
A general meeting of the Mulliez Family Association, in 2016, in the
North of France.
A general meeting of the Mulliez Family Association, in 2016, in the
North of France. ARCHIVES PERSONNELLES/JEAN DRIEUX Everything is done to ensure that no one strays from the clan.
Everywhere he travels throughout the world, be it Shanghai, Senegal,
Bordeaux or Madrid, Barthélémy Guislain always makes it a must to stay
at his cousins' homes, between factory visits, to talk about everything, especially the AFM. "The family is all-consuming. Some might feel
crushed by the stunning success of other cousins," said Antoine Mayaud.
"Some have moved to escape the social pressure of
Lille-Roubaix-Tourcoing. Our goal is to bring back those who are on the periphery, who felt hurt and felt the need to go live far away, and show
them that no matter how big or small their share is, they matter to us."
Pony rides and study trips The "affectio societatis" mission, employing
ten full-time staff, works relentlessly to promote family unity.
Meetings always end with a family meal, a massive reunion at the end of
the weekend where members eat,
drink, chat, sing and perform skits on theme nights (the Mulliez love dressing up). During the rest of the year, puppet shows and pony-riding lessons bring the little ones together, while travel trips are organized
for the teenagers, as well as company visits.
Adults, meanwhile, are offered group study trips three to four times a
year – about 40 cousins on a bus for a week of discovery in a foreign country like China, Russia or Brazil. It's a way to forge ties, because, ultimately, we like most those we know best. It's also a means of
spotting talent that will be encouraged to adopt positions of
responsibility within the empire. After all, entrepreneurship is the
family's primary DNA. Being a shareholder should not prevent one from continuing to create, which is what these masters of the motto call
"having shares in action."
Economic or financial training is provided to those who volunteer for
it, entailing a special curriculum for becoming a board director that includes job shadowing opportunities to "live my life," an experience
that allows the cousins to immerse themselves for three days in the activities related to the board of directors.
A club of entrepreneurs was established 15 years ago, chaired by Romain Mulliez, founder of La Vignery, a chain of wine shops, to help budding business leaders with their projects. Each cousin can use it to help
develop a business idea, benefiting from the advice of some 90 AFM
employees, among them lawyers, tax specialists and financiers, as well
as the expertise of company executives. The result was the launch of 45 businesses of all sizes, in fields ranging from a jazz bar in Lyon to
"Horse Pilot," a brand of horseback riding equipment.

"The best interests of the Mulliez nation will always prevail. They
are all in the same boat and stick together." Journalist Bertrand Gobin

On two different occasions, Barthélémy Guislain experienced firsthand
the strength of the family bond. When, in 2016, judges ordered
consecutive raids at the AFM headquarters for suspected massive tax
fraud, the cousins stood together. Ditto for during the Covid-19 crisis,
when the abrupt closure of the totality of its stores in March 2020
resulted in a 90% loss of sales. The head of the family held video conferences every Friday to keep worried cousins informed, and no one
batted an eye when he announced the suspension of dividend payments.
"Our relationships can be defined as tough, but they are honest and
there are no betrayals among us," he said. "We stand united when
problems arise. This solidarity has allowed us to overcome the crisis
and grow from it."
"The higher interest of the Mulliez nation always prevails," noted
journalist Bertrand Gobin, a family specialist who has devoted several
books to them. "They are all in the same boat and stick together. They
are at once Catholics, communists and one could almost say, a mafia."
The family has internal rules that govern relationships and behavior. If
a difficult conflict arises between two cousins, an arbitration
committee is set up to decide on the matter. An approach of listening
and encouraging discussion has been implemented so that secrets, even
the most taboo – adultery, violence – do not cause the business to rot from within. "When problems arise in a typical family, people cut ties.
Since we have chosen to stay together, we must learn to practise empathy
and humility, and know when to say 'I'm sorry' and 'thank you'," said
Antoine Mayaud. In the Mulliez family, dirty laundry is never aired
publicly.

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