page_title: Fnac
section_title: 1980s and 1990s
hierarchical_section_title: Fnac / History / 1980s and 1990s
caption_attribution_description: Français&#160;: Fnac des Ternes à Paris (Île-de-France, France).
context_page_description: Fnac is a large French retail chain selling cultural and electronic products, founded by André Essel and Max Théret in 1954. Its head office is in Le Flavia in Ivry-sur-Seine near Paris.
  Fnac is an abbreviation of Fédération Nationale d’Achats des Cadres.
context_section_description: FNAC became a Public limited company on the Paris stock exchange in 1980 when 25 percent of the company was offered to the public. SGCC, however, maintained a 51 percent control of the company, which now employed more than 2,700 and was declaring turnover of FFr 2.2 billion. 
  Théret left the company in 1981.
  In 1981, FNAC opened a store in Brussels, Belgium under the management of Sodal, a joint-venture between FNAC (40 percent) and the GIB Group (60 percent). The GIB Group later added three more stores in the mid-1980s, in Ghent, Antwerp, and Liège.
  In 1983, Essel retired and was replaced by the then SGCC president Roger Kerinec.
  In 1985, SGCC sold its shares to the insurance group Garantie Mutuelle des Fonctionnaires (GMF) due to growing competition from the French hypermarket and discount chains such as Carrefour and E.Leclerc. Michel Barouin, GMF's president and director general, took these positions at FNAC as well. In 1987, Barouin disappeared in an airplane accident and Jean-Louis Petriat was named to lead both GMF and FNAC.
  In 1988, the first Virgin Megastore opened in Paris. Petriat announced a FFr 1.5 billion plan to add 15 new stores to the 31-store chain and double the company's gross revenues, in order to compete with the new entrant to the French market. Petriat also had plans to expand into the German market. By this point, sales of compact discs and other recordings had joined books as the company's most important sources of revenue.
  During the late 1980s, Petriat added a music distribution division following the purchase of Wotre Music Distribution (WMD). In January 1991, Fnac Music was formed. Petriat hoped to build the first French multinational record company, with plans to capture as much as five percent of the market.
  The 1990s brought fierce competition after the arrival of HMV and Virgin Megastores in 1988 as well as the strength of hypermarkets. The company responded by cutting its prices and stepping up the competition, which forced HMV to leave France after only six months. Virgin Megastores remained in the French market, and decided to open two more stores in addition to its original store in Paris. In response to the megastore, as seen to the right, Fnac spent around $23 million to build its own megastore, at 32,000 square metres, more than twice the size of the Virgin megastore, which became known as "the Cathedral".
  In 1991, the first Fnac store was opened in Berlin continuing with Petriat's plans, this was close to the original Virgin megastore, which opened there only a few months earlier.
  In 1992, the fate of FNAC Librairie Internationale, featuring books in languages other than French, was sealed and closed after only a year of trading. This store was converted to a computer products-only concept, called FNAC Micro, which proved more successful.
  In 1993, the first Fnac store was opened in Madrid, Spain. However, the FNAC Music subsidiary, while posting some successes, failed to live up to the company's expectations and was unable to gain more than a two percent market share and was eventually sold off the distribution arm WMD, which shut down FNAC Music in 1994.
  Despite some failures, the company revealed growing revenues though shrinking profits in the early 1990s, also attributed to the recession in the French economy. In 1991 the company recorded gross sales of FFr 7.4 billion, while profits fell approximately FFr 55 million, to FFr 159.5 million. The following year, despite a rise in revenues to FFr 8.9 billion, the company's net income dropped to FFr 31.9 million.
  The falling profits for Fnac was a similar situation to the parent company, GMF whose share count totalled more than 80 percent. To raise more capital, GMF agreed to sell its shares of FNAC in July 1993 to Altus Finances, a subsidiary of government-owned Crédit Lyonnais, and Phenix, a property group owned by French waterworks company Compagnie Générale des Eaux, for FFr 2.4 billion. The deal came under scrutiny by the Commission des opérations de bourse (COB) though was allowed to proceed in September 1993. Crédit Lyonnai
caption: 26-30 Avenue des Ternes, 17th arrondissement of Paris, France.
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