Tengelmann Billionaire Haub Retires as Outsiders Win Role

Erivan Karl Haub, who became a billionaire at the helm of Tengelmann Group, retired as advisory board chairman as the family-owned German retail company shifted oversight completely to outsiders.

Two other advisory board members were also replaced as their terms expired, and the body for the first time no longer has members of the retailer’s founding family, Muelheim an der Ruhr-based Tengelmann said today in a statement. Haub, who turned 80 last year, was chief executive officer for 33 years until 2002, and is currently worth at least $4.86 billion, according to data compiled by Bloomberg.

Haub’s leadership, which included a stake in the A&P grocery brand’s holding company in the U.S. until 2012, built Tengelmann into a food and textile retailer with about 4,000 stores generating 11 billion euros ($14.6 billion) in annual sales and employing more than 80,000 employees. His sons Karl-Erivan and Christian remain as managing directors, a role they’ve held since he became advisory board chairman in 2002.

“Tengelmann has long been a construction site,” Boris Planer, chief economist at Planet Retail in Frankfurt, said in a phone interview. “The company struggled throughout its time of investment in the U.S., and at one point accepted its food-retail activities in Germany and Europe were not going to be successful either without prohibitive levels of investment.”

The retailer has been adding assets since 2000 in non-food operations and online commerce, and “this is where Tengelmann seems to continue to generate decent profit,” Planer said.

Real Estate

Tengelmann Group was founded in 1866. Its current brands include the Kaiser’s and Tengelmann supermarket chains, Kik apparel discounters and OBI do-it-yourself hardware stores. It also owns the Trei real-estate management and development company, which was founded in 2008, and the Tengelmann E-Commerce GmbH Web-based business.

The advisory committee will choose a new chairman at its next meeting, Tengelmann said today, without specifying a date.

The German company bought a stake in Montvale, New Jersey-based Great Atlantic & Pacific Tea Co. in 1979. Tengelmann held 40 percent of the U.S. retailer, which owns such grocery chains as A&P, Waldbaum’s, Food Emporium and Pathmark, and Christian Haub was its chairman when the unit filed Chapter 11 protection from creditors at the end of 2010.

A&P emerged from bankruptcy in March 2012 controlled by investors Yucaipa Cos., Goldman Sachs Group Inc. and Mount Kellett Capital Management LP.

War Concern

Haub invested in A&P in the 1970s “because he was afraid of the potential of a World War III, so in case Europe went to war, he was going to move a part of the family fortune to the U.S.,” Planer said. “It was never successful commercially and ended sadly. The U.S. withdrawal and Tengelmann’s latest investments in Europe reflect the fact that the Haub family is comparatively risk-averse.”

Karl-Erivan Haub took over management of Tengelmann’s European operations while his brother was running the U.S. assets, Planer said.

Karl-Erivan “grew up in a retail-business environment,” Planer said. His background at McKinsey consulting company has helped give him “a good knowledge of retail, finance and restructuring. The son becoming CEO saved Tengelmann as a company.”

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