Rubbermaid Inc. plans to boost its European housewares and consumer goods stake by buying Curver Group, the largest supplier to retail stores on the continent.
Curver Group had sales of about $222 million last year, about 15 percent of Europe's market for plastic housewares sold through retailers, said Arthur Spierts, spokesman for DSM NV, Curver's parent company. Rubbermaid spokeswoman Lorrie Paul Crum estimated her firm has nearly 10 percent of that market.
Both are dwarfed by Tupperware's home-based sales of about $600 million a year in Europe.
Rubbermaid agreed in principle to buy Curver from DSM of Heerlen, the Netherlands, for undisclosed terms and expects to complete the deal by late this year. It will get two plants in the Netherlands, including one in Goirle, where Curver is based, and other production facilities in Spain, Great Britain, Hungary and Belgium. Rubbermaid's housewares production plants are in France and Germany, and its Little Tikes subsidiary makes toys in Luxembourg.
One analyst sees the move as a step for Rubbermaid to reach ``a critical mass in Europe.'' Rubbermaid lacked a coordinated approach to Europe until 1995, when it bought Injectaplastic SA of Groissant, France, and Dom-Plast SA of Slupsk, Poland, said Eric Bosshard of Midwest Research/Maxus Group in Cleveland. In 1994, Rubbermaid sold its minority share in joint venture Curver Rubbermaid Group to DSM when the two companies could not agree on strategy.
Crum said Rubbermaid recently ``turned a tidy profit'' in Europe's housewares market, only two years after making a serious run in it.
DSM, however, has been disappointed with Curver, which has not met DSM's target of 15 percent return on investment. Spierts said Europe's market is fragmented and often dominated by local producers.
Curver tried cutting costs, including shutting plants in France and Germany in the past few years, but the moves were not enough to meet profit goals. DSM considered major investment in Curver to boost its economies of scale, but since Rubbermaid was growing in the market, DSM decided that selling Curver ``was the best alternative,'' Spierts said in a telephone interview.
Crum agreed Europe's market is fragmented, but she claimed Rubbermaid is making more retail alliances. In urban areas, retail sales are dominated by boutiques, while discount and specialty stores are growing in suburban areas.
``There is tremendous opportunity because we offer a full selection of products to retailers,'' Crum said from Rubbermaid headquarters in Wooster, Ohio.
Through the deal, Rubbermaid will enter Spain's market and Curver's Hungarian plant will help its push in Eastern Europe and Russia, Crum said.
Curver has European designs in housewares, leisure goods and outdoor toys that may be exploited for North American and international markets, she added. And Curver's stake in lawn and garden furniture would put Rubbermaid back in that market after it got out of resin furniture in North America in 1994.
Rubbermaid had exited that business when low-priced competitors made markets ``a price game,'' product liability issues were in the limelight and resin prices were high. Curver's furniture line includes interior design products, unlike what Rubbermaid had made.
Crum said Curver will boost Rubbermaid's international sales to about 25 percent of its total, up from 19 percent last year. Rubbermaid's goal is 30 percent for international sales, and the firm sees more potential in Asia and Latin America.
Rubbermaid plans to base the merged home products businesses in Goirle under David T. Gibbons, president of Rubbermaid Europe in Brussels, Belgium.
DSM has annual sales of more than $5.6 billion. Its major businesses are plastic resins, synthetic rubber, fiber intermediates, fertilizers and fine chemicals.