The Sages Family Business Story: Planning the future

The Sages Family Business Story: Planning the future

The KPMG Sages Family Business Story is a series of fictional case studies based on the SAGES Family Business, the little grocery store that became an entrepreneurial success.

Adjunct Professor of Entrepreneurship and Family Enterprise, INSEAD

KPMG contributor


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“Thomas celebrated his 80th birthday in 2004 – a celebration of the extraordinary accomplishments of a visionary. He was in great health; surrounded by his wife, their three children and their spouses, and their grandchildren.

Additionally, his eldest son Louis from a short-lived first marriage also attended Thomas’ birthday celebrations. Louis had been raised by his mother and his stepfather, but had become closer to Thomas in recent years.”

The key decisions of the business

Thomas was still very active in the key decisions of the business and most employees at times feared and cherished his regular visits to the offices and stores. However, he was becoming less prone to encourage risks. He had started to have disagreements with his children who wanted to try new ideas: reorganising the franchise system, trying new distribution channels, using internet, managing the real estate as an independent entity – these topics were sources of difficult conversations and, as a result, were not re-addressed.

The company was becoming slow to adapt to new market conditions and was starting to lose some drive.

Invited to join the business

From the beginning the business had a legal board of directors, consisting of Thomas, Martina and David. They formally met around lunch once a year, signed the legal documents of the board, the general assembly of shareholders, and enjoyed the friendship and business success. When his children joined the company, Thomas invited them to join the board.

When Charles left the business, he also left the board, in spite of his father’s desire to see him stay. David Senior unfortunately passed away in 2004. His shares went to David Junior, who was invited to join the board. The board was now meeting twice a year but spent significantly more time reviewing the business results and some minor details than discussing the future strategy.

Thomas and Martina’s grandchildren were growing up, and some of them had completed their university education. Caroline and David Jr., in consultation with Timothy, invited their older children, Jim and Lucie, to join the business.

The business and the family

Lucie started working in supermarkets as a shelf manager, while Jim was asked to investigate how to start international expansion in neighbouring countries. During that time, Caroline’s younger son, Peter, had started selling high-quality wines on internet, putting into action his business school project. He had approached Timothy to talk about possible synergies with the SAGES group.

At this point, Timothy felt that action was needed to prevent the business and the family from facing major issues. Urgent reflection was needed on strategy, and the board of directors was not fulfilling its role. Decisions would have to be taken regarding the best route to international expansion, and the financing required.

Raising questions

Another set of questions was raised by the development of internet. What could be done to have solid discussions and to restore the business dynamism that had been so impressive in the past?

On the family side, two family members had recently joined the business – should Timothy accept all the cousins who would show an interest? How would their careers be managed? Together, Caroline and David owned 15% of the shares and they both sat on the board of directors. Would that give their children a priority over the others? What about Charles and his family? And Louis? How would Thomas’ shares be distributed?

Christine Blondel has contributed to several books, articles, and case studies on family business, and is well-placed to explore the unique challenges faced by family-owned businesses.


KPMG firms are committed to working with and supporting family-owned businesses; they are an important part of the global economy and our business, so we are dedicated to understanding them in greater depth. We recognise that the “Issues of Ownership”, sometimes known as the family component, bring unique concerns and challenges, which if overlooked have far reaching implications.

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