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Selected Case

published: 29 May 2017

  • Topic: Family Business
  • Industry: Apparel
  • Region: South America

A well-known lingerie retailer in Colombia, Leonisa is a family-owned company that barely survived a second-generation succession crisis. Brothers Joaquín and Julio Ernesto Urrea founded the firm in 1956, and over 50 years built one of the most recognizable brands in Latin America. While they each had an equal stake in the company, their respective families were not of equal size: Joaquín had 11 children including nine boys, Julio had three daughters. While the girls were interested in design and fashion, the boys were keen to create satellite ventures around the core brand. When one of the co-founders died, a family dispute erupted over whether the dividends should be plowed back into the business or distributed to the shareholders. A mediator obliged the warring branches to reach a settlement that would allow Leonisa to survive. The ousted sisters eventually had their own success story by launching a new business based on their core competencies.

Pedagogical Objectives:
The case offers an opportunity to learn from a family-run company that survived a succession crisis, requiring students to think about family differences from a shareholder point of view, and the role of mediators in saving warring family branches from destroying the firm. It underlines the need for co-founders whose families have different interests to have a long-term plan to prevent a clash of clans. In this instance, one branch got out of the original business and constructed a new business based on their fashion and design skills. Students of family business in Colombia and Latin America will learn lessons from a family dispute that was ultimately resolved.

Leonisa, Ellipse, Urrea, Women’s Underwear, Lingerie, Colombia, Brassieres, Ana Patricia Urrea, Urrea Jiménez, Urrea Arbeláez, Fernando Urrea, Carlos Ignacio Urrea, Julio Urrea Jiménez, Wicfe, Succession, Next Generation, Education, Entrepreneurship, Leadership