Hello and welcome to Outdoor Minds. Risk is an eventual danger, more or less predictable, that can cause harm. We don't all have the same tolerance for risk. Some have a deep aversion, others expose themselves with delight. I am Armel Solelac, serial entrepreneur, investor, and double world traveler. For this 6th season, we will explore the drivers of risk-taking with athletes, entrepreneurs, investors, and inspiring personalities. Let's go for a new meeting. This episode of Outdoor Minds is brought to you with the support of Bov and Beyond, the early-stage investment fund specializing in tourism, sports, and leisure. Hello, today we have the pleasure of welcoming Franck Gervais, CEO of the Pierre et Vacances Center Parcs group. Hello Franck.
So, were there any early signs in your childhood that foreshadowed the direction your professional career would take?
Yes, I think there is one: my parents were shopkeepers, so I spent a lot of time with them in the store they ran. So the business streak was there early on, and also a certain sociability because I spent my time chatting with lots of customers from a very young age. That I think made relationships easier for me.
So between your childhood and today, what were the major stages of your career?
Well, I'll do it in 45 minutes. No, I'll do it in 2 minutes. So I first had a scientific background. I was pretty good at math and physics. So after high school, it was preparatory class for the grandes écoles. Then I entered the École Polytechnique, which I continued by attending the École des Ponts et Chaussées. As a senior civil servant in a major state corps. That means the first years, then you commit to working the next 10 years for the state. And that suited me very well because I wanted to give back to the state, to the community, what it had allowed me to do in life, and I wanted to work for the public. So that's why I took that path. So first years within the state. My first job was in 2001 at Nice airport to build terminals and runways. It was great. I was 25 and I had large project management teams. So we were in public works, heavy stuff, but you can concretely see the realization of what you do. Then I came back up to Paris to join the ministerial cabinet of a politician who was Minister of Transport, Gilles de Robien, a remarkable man. So I was his transport advisor for 2 years. Then I joined SNCF as chief of staff to the then chairman Louis Gallois and the then CEO Guillaume Pepy. There, three positions at SNCF. First, I was in charge of all the lines departing from Gare du Nord, the suburban lines, not necessarily simple on paper but it was a truly transformative experience. Then CEO of Thalys and then CEO of Voyages-sncf.com. That made about ten years at SNCF. And then my last two positions: for 3 and a half years, CEO Europe of the Accor group, in charge of all European countries, half the business. And then for 4 years now, this beautiful position as CEO of the Pierre et Vacances Center Parcs group. So there you go, it's a bit long but in the end not that long, and above all there is a common thread: it's the transport, tourism, hospitality sector.
Exactly, can you present the group a bit? In the industry, we call it PV and CP.
So, it's a very beautiful group, which includes four brands: Pierre et Vacances, Center Parcs, Adagio, and Maeva. Pierre et Vacances are holiday residences by the sea and in the mountains in France and Spain. We have 200 residences in total. We are the leader in holiday residences in France, number 3 in Europe. Center Parcs are about thirty parks, large parks in the heart of nature where you come with your family for 4 wonderful, authentic days to recharge in a remarkable and preserved environment. And we are in France, Belgium, the Netherlands, and Germany. Adagio are aparthotels. So aparthotel is the best of both worlds between Airbnb and hotel. You have the space of an Airbnb and the service of a hotel. These are aparthotels mainly in urban areas, and we have 120 in Europe. And finally, Maeva is a distribution platform that distributes, a bit like Booking or Airbnb, all types of offers a vacationer might want to book, but with a real notion and commitment to the environment and the customer, which is not necessarily the case with all digital platforms. In the end, it's a group that is a leader in Europe in proximity tourism. We have a little over 12,000 employees, present in 5 countries, and we do about 2 billion in revenue, 175 million in margin, and above all it's a group made up of very committed men and women dedicated to this cause. We also have a very strong reason for being that guides us: to offer everyone the best vacation in a preserved environment. The essential, even we call it the essential in a preserved environment, that's what guides us. So these are remarkable people and a remarkable group.
You took up your position, if my memory serves, in a context that was really not easy. Can you tell us some anecdotes from that time until today?
Yes, I arrived in January 2021, on January 7, 2021. And if you remember, you may not remember January 7, 2021, I'm sure. But what was happening at that time? Actually, we had experienced Covid in March 2020, then summer came and spared us. We all managed to go on vacation a bit, and then at All Saints' Day, we all got a cold shower because Covid came back, and it came back for twice as long as we had behind us. When I arrived, I knew Covid was going away. I didn't know for how long by definition, and in fact Covid really undermined the group because for the equivalent of a year, everything was closed. Everything was closed, meaning we had no revenue, no customers, and during that time we still had very high costs. So between the context, the environment, and the conditions of my arrival and what I was supposed to achieve, which had been discussed for 4 to 6 months, and the reality I found when I arrived, which was damaged, heavily damaged by Covid, well there was a gap because there was a real existential threat in January 2021 for the group. If Covid continued and we still had no income, we were burning 30 million euros in cash per month with no revenue. The group had gone into debt to cope, with state-guaranteed loans and so on, but of course there was a limit. We couldn't live for 2 years burning 30 million per month. So we had a limited lifespan, and we had to make very heavy decisions very early on. That was the particularity of my taking office: I had to launch what we call a major restructuring. I spent most of my time in commercial court with lawyers, with bankers, organizing the group's restructuring, but in the end it's easier when it goes well. Today, the result is that the group, despite Covid and thanks to this restructuring and the strong measures we took, is much stronger, much more solid, including financially, after Covid than before Covid. To give just one figure: it consumed about 600 million in cash, and despite that it came out much stronger because we took the right measures collectively.
I remember being interviewed by a journalist, I don't remember if it was Le Monde or Libération, but it doesn't matter. Her entire article, it was an article in September 2021 about the group's difficulties, and she tended to bury the group a bit quickly. At the time I told her, 'But wait, the group wasn't built in a day, it won't die in a day either. Don't bury it too quickly because first of all, in tourism in general, we have enormous resilience, but this group is particularly resilient.' And I remember that at the time, I was almost the only one to publicly take a defensive position, even though we had no business or other relationship. But I thought it was completely ridiculous to crucify a group like that so quickly just because it was going through a difficult period. All companies have difficult periods at some point.
Exactly. And you are absolutely right, and few did it. It's simple, at that time we looked, we had 97% of press articles, online or offline, that were burying us or were negative to very negative, and 3% that said, 'But like you, wait, the group still has resilience and it might bounce back.' So we are delighted to have proven the 3% right, of which you are a part.
It's simple, roughly, we looked at that time, we had 97% of press articles, online or offline, that were burying us or were negative to very negative, and 3% that said, 'But like you, wait, the group still has resilience and it might bounce back.' So we are delighted to have proven the 3% right, of which you are a part.
What is risk for you? What definition do you give it?
For me, it's the loss. I would define risk as the loss you are willing to assume if things go wrong, according to scenarios in which things go wrong, and so you have to be ready to take it.
And would you say that the biggest risks you have taken as a leader, what are they? Can you give us some examples and especially why you took them?
The biggest risk, I think it's clearly here at the head of this group. I arrive. You are asked to make very heavy decisions. How much debt will you take on for a group like this? So we chose, the group already had 800 million in debt when I arrived, and I take on 300 million more, 1.1 billion. Everyone said, 'But you'll never be able to repay it.' Another risk is to say I keep the group intact. There was another solution, which was to say, well, we'll cut the group into pieces, everyone will help themselves, including people not necessarily the best intentioned, and then everything goes flying in pieces. There's no more group. So it's the end of a 55-year-old group. Another risk: you say, I arrive after 3 months, I had to talk to creditors, shareholders, our owners too. We don't own our walls. And to say, look, there is a future for this group. What is the future? We think that post-Covid, the group, whereas it had never made more than 80 million in margin per year, can actually within 5 years go for 200 million in margin. So the risk was ultimately not being credible, not being followed externally and internally, and if you make the wrong decisions, well as a corporate officer, as CEO, I am a corporate officer, it's a risk for the group. If things go wrong, the group can die, disappear. That was the risk: things like bankruptcy, liquidation, or that you make the wrong decisions as a leader and then you are prosecuted because you didn't make good management decisions. And so you must not have a trembling hand because if you reason like that, you end up not making any decisions, you are paralyzed, and you do nothing. So you have to accept, saying you have to make the best decision with all the parameters I have in hand, and I know I don't have them all, but I take the one that I think I will be able to justify in 6 or 12 months.
And when faced with risk, how do you approach it? Does it excite you? On the contrary, does it paralyze you? How do you experience it?
Neither one nor the other. It doesn't excite me, not really, and there are other things that excite me more. It doesn't paralyze me either, but it motivates me. I think it's interesting to manage by risk because it helps you push the cursor as far as possible while avoiding crossing the red line, for sure. The yellow line too. You can even walk on the yellow line, but you say, look, we can do this because at worst, here's the impact on us. Are you ready to take this risk of loss? Yes. Well, go ahead because at worst this happens, but at best look what happens. And so I think it pushes people to their limits, and that's what we did. The group never thought, as you said earlier, many people said it would never recover because of this and that over the last 10 years. Everyone said, but we believe in the reinvention of the group and we will write it together. And so we managed by a vision of opportunities and also by risks.
If you look at your career, do you have in mind a big mistake you made, and most importantly, what do you take away from it?
Yes, of course. And if we talk about my professional career, probably, and I didn't mention it earlier, but at one point I left the SNCF, which I loved, because I had an offer to join a group that is a very good group, and in which I stayed a little over a year because I realized that the group was great, the values, there's no need to describe it, it's obvious. But it's not what I was looking for, it's not where I thrived. And so I discovered that about the day I arrived because I didn't ask myself enough questions before going. And so there, I was really doing public works in the maritime field, which frankly was neither my area of expertise nor my passion. So I learned, and I learned to look twice before making choices. So it's instructive.
