Article

16.04.2018

Toys "R" Us: the fall of a giant unable to adapt

A long-time behemoth in the toy industry, the American group was not able to stay ahead of the digital curve and respond to new consumer expectations. A resounding fall which should serve as an example.

The downfall of America's biggest toy retailer, Toys "R" Us, is the story of a giant with feet which turned to clay due to digital transformation. Unable to handle competition online and struggling with colossal debt, the group declared itself bankrupt last September, sending shock waves through its many branches around the world and its numerous partners. Apart from its leveraged buyout (2005) by investment funds (leading to a debt system which became unmanageable, totalling nearly 5 billion dollars) the end of this flagship brand shines a spotlight on the inability of large enterprise to keep up with the digital revolution, due to a lack of both innovative ideas and adequate financial resources.

An example of "Kodakisation"?

At the point that it came tumbling down like a house of cards, the American giant, founded in 1948, had 735 shops and over 30,000 employees in the USA. Even if the group had been experiencing difficulties for some years, this chronicle of a death foretold is an unfortunate example of "Kodakisation". This neologism – a reference to the former major photography company Kodak – indicates an inability to transform despite a favourable position, to evolve one's business model, change market or adapt to technological progress, new consumer expectations, etc. Put differently, in a market disrupted by the arrival of more innovative competitors – and not small ones, as we're talking among others about Amazon, which has since taken the top spot in online toy retail – Toys "R" Us was not able to "burn its bridges" and transform into a different company, one better adapted to the era of e-commerce.

Failure to stay ahead of the digital curve

However, when it was still run by its founder Charles Lazarus, Toys "R" Us was a model of innovation. Its original concept was to create a toy "supermarket", an Ali Baba's cave for children (and a "trap" for parents). This was a success which transformed the toyshop into a national and international chain with hundreds of thousands of Barbies and Hot Wheels cars. In the 1980s the company was still revolutionary, being one of the first to implement computer-based stock management. It was a visionary concept which put the New Jersey company ahead of the pack – a success which contrasts starkly with the errors that led to the company's failure to stay ahead of the digital curve and sent it to the wall. Coincidence or not, Charles Lazarus retired in 1994, the year in which Amazon was founded by Jeff Bezos, one of those who dug Toys "R" Us's grave. For example, at the start of the 2000s, the brand benefited from granting an exclusivity agreement for its products to… Amazon! But after 10 years of partnership (in 2006), the Seattle colossus opened its platform up to other players in the sector, leading to a fatal slow-down for Toys "R" Us.

Digital marketing is not enough

Toys "R" Us's error was its failure to invest in e-commerce in time. And when the company did want to do so it was too late, due to both the cumulative delay and the lack of financial means. According to some observers, the failure of the American group is synonymous not only with its inability to get to grips with digital transformation, but the result of an "archaic" approach to business more broadly. This was the case when, at its lowest ebb, the company focused heavily on digital marketing and advertising, aiming to boost traffic in its (too?) numerous physical stores. However, with an obsolete business model, this was a case of fighting a losing battle. It is proof that, more than being just a coat of "digital marketing" varnish, the digital era requires a real business revolution to respond to new consumer expectations, technological progress and the challenges posed by competitors. Adapt or fizzle out…

Article

10.06.2024

Electronic invoicing between companies to become mandatory

The bill to introduce this obligation in Belgium has been submitted to the Federal Parliament. If the draft bill is approved, B2B e-invoicing will become mandatory from 1 January 2026. Our experts explain why Belgium wants to introduce these new rules, what the implications are for your company and how we can better support you.

“The bill is consistent with international developments and initiatives at the European level,” says Nicolas De Vijlder, Head of Beyond Banking at BNP Paribas Fortis. "Europe's ambition is a harmonised digital standard. Structured e-invoicing between companies will also reduce the administrative burden of invoicing, enabling companies to work more efficiently and increase their competitiveness. The automation of VAT declarations will also help governments prevent tax fraud and adjust economic policies based on more qualitative data.”

Evolution rather than a revolution

“The new legislation is an evolution rather than a revolution,” adds Erik Breugelmans, Deputy Managing Director at BNP Paribas Factoring Northern Europe. "Digitalisation is becoming pervasive at all levels of society, as we have seen with the increase in electronic payments, as well as the additional obligations in recent years regarding electronic invoicing to the government. In this sense, the bill for mandatory electronic invoicing between companies is a logical next step. Our bank is happy to contribute to this process, although we do not intend to offer the same services as accounting software or fintechs. However, we are happy to help our customers with payments and financing."

The impact on businesses

“Customers need to be aware that the new regulations will have an impact on their internal and external processes,” continues Erik Breugelmans. "The majority of Belgian companies mainly serve an international market, which means that the introduction of electronic invoicing will be more complex for them than for companies operating in the domestic market. As the legislation will be introduced in one go, they need to start preparing now."

“The new rules will affect a company’s accounting department as well as its IT department,” emphasises Nicolas De Vijlder. "The procedural requirements are key, otherwise the automated process will not work. However, one of the main benefits of advanced automation is that everything can be done faster and more efficiently. The time between sending an invoice and paying it will be shorter and cash flows more predictable. In addition, it will also reduce the risk of error and fraud, as all transactions will pass through a secure channel."

Ready to offer you even more and better support

“Thanks to the far-reaching digitisation resulting from the new regulations, we will be able to further optimise payments,” concludes Erik Breugelmans. "As a bank, we need to finance our customers’ receivables as quickly and efficiently as possible, so that they have easier access to their working capital. In addition, because we have already gone through an entire process in terms of large-scale automation, we will be able to adapt quickly to the new rules. We can also draw on the expertise of the BNP Paribas Group, which is currently developing an e-invoicing solution for large companies."

Want to know more?

Listen to the episode on B2B e-invoicing :

Article

22.06.2023

Shipping: focus on the impact of decarbonisation and energy transition

At the end of May, BNP Paribas Fortis and the University of Antwerp brought together a number of experts to discuss the many challenges involved in decarbonising the shipping sector. What are the key points to remember?

Established 12 years ago, the BNP Paribas Fortis Chair in Transport, Logistics and Ports - linked to the University of Antwerp - conducts in-depth research to find concrete and innovative ways of creating an increasingly resilient – and sustainable – maritime ecosystem.

Building on the success of its first two major events in 2017 and 2019, the Chair has decided to do it again this year. On 25 May 2023, a number of experts and stakeholders from the port and maritime transport sector gathered at the BNP Paribas Fortis premises in Antwerp to discuss the impact of decarbonisation on the maritime ecosystem.

Here are their main findings...

1 – We need to move up a gear

Shipping is currently the most carbon-efficient form of commercial transport in terms of CO₂ emissions per tonne and kilometre. But it can do better.

So far, industry players have favoured quick wins, such as modifying ship propellers and adjusting speeds. But on 25 May, the experts agreed that now is the time to experiment with new fuels and technologies, and move towards (near) zero emissions. The pace of change is accelerating, but there's no silver bullet yet. The costs (and risks) are huge.

2 – International regulation, please (and only one)!

The regulatory framework is complex and constantly evolving.

The International Maritime Organisation (IMO), which reports to the UN, is committed to reducing the carbon emissions from all ships by 40% by 2030 and by 70% by 2050 compared to 2008.

The European Union has committed to reducing greenhouse gas emissions from shipping by at least 55% by 2030, compared to 1990 levels. By 2024, an Emissions Trading Scheme (ETS) will apply to all ships of more than 5,000 gross tonnes sailing to or from EU ports.

In short: things are moving, and in the right direction. The problem, according to industry players, is that numerous regional and supra-regional programmes continue to coexist. This leads to administrative and financial overload.

On 25 May, all those involved agreed on two points: firstly, that a single international policy is essential, as this is a global sector; and secondly, that players who do not comply with the rules must be sanctioned.

3 – The transition to carbon neutrality will be costly 

The investments required to build new greener ships is estimated at $5 trillion by 2050. The cost of modernising the existing fleet is not yet known, but it will not be zero. In addition, the investment required to renew port infrastructures promises to be huge.

4 – Fuel and/or preferred technology: uncertainty reigns

What will be the fuel or technology of the future? Opinions are divided.

Many types of low-emission fuels are likely to coexist for some time. Electricity will only be used on coastal vessels, ferries and some tugs. Large ships will use liquefied natural gas (LNG) or liquefied petroleum gas (LPG), methanol, ammonia and possibly even biofuels.

Long-distance shipping will initially depend on heavy fuel oil, possibly with carbon capture and storage. Hydrogen has potential, but its density, storage and handling raise questions. Wind, solar and nuclear power are also in the mix.

But the real problem at the moment is that while the number of ships that can run on cleaner fuels is increasing, these fuels are not yet sufficiently available internationally. In other words, supply is much lower than demand.

5 – Banks play a key role

Banks have a key role to play in financing the energy transition. In 2019, eleven financial institutions – mostly European, including the BNP Paribas Group – launched the Poseidon Principles to support the transition to low-carbon shipping. This global framework makes it possible to measure and disclose the carbon intensity of bank loans in the maritime sector. There are now 24 signatories, including Japanese financial institutions. And that’s good news.

Want to know more?

Presentations, videos and photos from the 25 May event are available on this page.

Article

07.12.2020

Scale-up concludes mega contract in the midst of the coronavirus crisis

The Antwerp-based scale-up IPEE transforms ordinary toilets into innovative products. BNP Paribas Fortis is more than just the financial partner. IPEE have already come into contact with the right people via the bank’s network several times.

“The traditional urinal has no brain. The infrared eye simply detects that someone is standing in front of the urinal. The result? A lot of wasted water and misery”, says Bart Geraets, who founded IPEE in 2012 together with Jan Schoeters.

The scale-up devised new measuring technology that makes it possible to detect through the ceramic of a urinal when someone is urinating or when the urinal is blocked. With this innovative technology, the scale-up designed urinals that use half as much water and toilets that can be operated without touching them.

Sleek design

“IPEE is an atypical scale-up that innovates in a sector where little has changed in the past few decades”, says Conchita Vercauteren, relationship manager at the BNP Paribas Fortis Innovation Hub.

Jan Schoeters: “At first we mainly focused on durability. But we soon felt that with non-residential applications, the potential water saving is subordinate to the operational aspect. We had to be able to offer added value for each stakeholder in the purchasing process.”

We opted for sleek designs to appeal to architects and end users. The simple installation attracts fitters and maintenance people see the advantages of the sleek design - that is easy to clean - and toilets that do not overflow.

New investors

Until 2015, Schoeters and Geraets, along with Victor Claes, an expert in measuring methods and originator of the IPEE technology, put their energy into product development and market research. The financing came mainly from money that they collected in their network of friends, fools and family.

They had to go elsewhere to obtain the funds for production and marketing. Geraets: “We had a product, but it wasn’t ready to sell. To take that step, we needed investors.”

Looking for new investors was a challenge. Schoeters: “We aren’t software developers and we don’t work in a sexy sector. So we miss out with a large target group of investors.”

The young scale-up attracted the attention of Ronald Kerckhaert, who had sold his successful company, Sax Sanitair, at the end of 2015. “He pushed us to think big, more than we dared ourselves. And he never headed for an exit. His express goal was to put our product on the world market”, says Schoeters.

Growth path

IPEE has achieved impressive growth since then. The product range was expanded and new sectors were broached: educational institutes, office buildings and hospitals. The technology is now used by Kinepolis, Texaco, Schiphol and Changi Airport (Singapore).

“We very soon turned to Asia, because new technology is embraced more quickly there”, Geraets explains. The IPEE technology is distributed in Singapore - where the scale-up has its own sales office - China, Thailand and Vietnam, among other places. About half the turnover comes from abroad, although the coronavirus crisis will leave its mark this year.

Supporter

“My biggest headache is achieving healthy growth”, says Bart Geraets. One advantage for IPEE is that in coronavirus times, hygiene stands high on the agenda. The scale-up's  touchless toilet facilities meet that demand.

At the same time, the shortage of water and the need to use water sparingly is very topical. Geraets: “We notice that in these strange times we are gaining an even bigger foothold. In the midst of the coronavirus crisis we concluded a contract with the world’s biggest manufacture of toilet facilities. Now it’s a matter of further professionalising our business, the personnel policy and the marketing.”

The company’s main bank is an important partner here. Schoeters: “It is more than just a financial organisation. We have already come into contact with the right people via the bank’s network several times. Our bank feels more like a supporter that is also putting its weight behind our story.”

Article

02.06.2020

#StrongerTogether Lasea decontaminates masks using lasers

Lasea conceives precision laser solutions for high-tech industry. Faced with the coronavirus crisis, the Liège enterprise revived an old project to decontaminate surgical masks – and respond to the shortage of face coverings.

The secret weapon of Lasea is the femtosecond laser. This has an accuracy of 0.2 micron, 200 times smaller than a hair. Lasea’s high-tech equipment is notably used in horology, electronics, medicine and pharmaceuticals. Given the shortage of surgical masks, the Liège enterprise revived an old project for decontaminating, as Lasea CEO Axel Kupisiewicz explains.

“We had tested laser decontamination 20 years ago. At the time, the project had no commercial outlets. With the coronavirus crisis, we proposed using it to decontaminate used surgical masks. That’s how we joined a consortium managed by the University of Liège to develop a decontamination chain. Usually, it takes many months, even years, to carry out the tests and obtain certification. Thanks to the collaboration between the university and the Walloon government, everything was done in a few weeks.”

Reinvention thanks to a crisis

Lasea proposed two decontamination techniques. “For the first, we used a laser device manufactured by Aseptic Technologies from Gembloux, which we adapted to meet local needs,” explains Mr Kupisiewicz. “For the second, we have entered into a partnership with Optec, in Mons. This latter solution makes it possible to treat three or four times as many masks each day.”

Lockdown has also generated a new dynamic within the business. “We launched a brainstorming session to refine the strategy for the coming years. The result: a new organisation after the move to our new building, financed by BNP Paribas Fortis. On the other hand, the widespread use of videoconferencing has created a new dynamic at the heart of the company. Previously, the Belgian team, who were gathered physically on site in Liège, were in a way privileged in meetings with their French, American or Swiss colleagues, present via videoconferencing. Now, everyone is on an equal footing because everyone is behind their screen by themselves. It’s one of the interesting aspects of lockdown that has created a global spirit in an international group.”

A relationship of trust

“BNP Paribas Fortis has been by our side since the beginning, 21 years ago,” recalls Mr Kupisiewicz. “First via the local branch in Sart-Tilman and now, for seven years, via Corporate Banking. Given Lasea’s developments, enlargement to several banks was necessary, but BNP Paribas Fortis remains the primary bank. I place huge importance on personal relationships and a climate of trust. Be it the branch manager or staff at Corporate, our relationship managers know our activities and our products. It’s important: they understand the issues we face and as a result they know our financial needs.”

“Since the beginning of the crisis, the bank has asked if we need support to develop this project of decontaminating masks. We have been able to implement these solutions by redeploying our teams and we have not needed a large injection of capital. We have, on the other hand, welcomed the moratorium on repayment of capital on all our investment credits.”

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