Akzo to Divest Paint Shops in Germany in Retreat From Retail
The 72 stores will be sold to independent wholesale distributors, the Amsterdam-based maker of the Sikkens, Herbol and Dulux brands said in a statement today.
“We are changing the marketing strategy of our German decorative paints business to focus on our key organizational strengths of marketing and distributing,” said Ruud Joosten, head of the decorative paints division. “This is part of our ongoing efforts to strengthen both our organizational efficiency and our profitability in Germany.”
Akzo Nobel said a review of its eight offices in Germany will follow. Five years after the $18 billion purchase of Imperial Chemical Industries, Chief Executive Officer Ton Buechner is tackling the complexity of a sprawling company with assets spanning coatings, chemicals and specialty ingredients used in cosmetics.
The company will choose the most efficient distribution channels instead of having the expense of operating stores itself. In December, Akzo Nobel sold the 138-year-old Glidden brand to U.S. competitor PPG Industries Inc. for $1.05 billion. The deal transferred about 600 of Akzo Nobel’s own paint stores, giving PPG a retail base of about 1,000 shops.
The sale of the paint stores coincides with the planned sale of a building-adhesives business with annual sales of about 200 million euros ($261 million). Germany generates about 1.3 billion euros in annual revenue for Akzo Nobel.
The Dutch company operates 17 factories in Germany, where it has 3,900 employees.
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