chapter  3
18 Pages

Go West

C&A’s Motives and Strategies for Expansion From Europe Into the Western Hemisphere, 1945–1962
ByMark Spoerer

This chapter argues that the corporate governance and in particular the succession strategy of the Brenninkmeijer family who run the Dutch clothing retail chain C&A induced the firm to pursue a strategy of permanent expansion abroad. C&A had expanded its branch network to Germany in 1911 and to the UK in 1922. Yet, just as the First World War brought into question whether Germany was the right place to do business, the Second World War and especially the emerging Cold War caused concerns about Europe as a whole. The Brenninkmeijer family saw its future and that of C&A to be in the United States—a safe haven of capitalism not endangered by the threats of communism which haunted Europe. C&A Inc. opened its first store in New York in 1948; for the next 15 years this poor-performing store was to consume a notable share of the (abundant) profits which the three national C&A firms earned in Europe.

Two further motives to move to the Western Hemisphere were safeguarding the wealth of the family and tax avoidance. Parallel to its business activities, and with more success, the Brenninkmeijers restructured the organisation of their personal financial wealth and that of the C&A group in a way that a large fraction of the profits flowed directly from Europe to tax havens in Canada and Curaçao. These overseas holding companies controlled a part of the assets of both the C&A group and the family wealth. In the event of political conflict in Europe, they would also have been able to take over the remaining assets. This chapter will show how the devastating effects of World War II, the emerging Cold War and the increase of corporate taxation made the multinational retailer C&A turn to the Western Hemisphere.