Faced with declining sales and asphyxiated by colossal debt, the group announced, Monday, 23 January, yet another restructuring. The terms and conditions of the reorganization will be detailed here on Wednesday.
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Tough week for the 16 000 employees of Vivarte. Monday 23 January, the management announced, during a group committee, yet another restructuring, which will grow by two new plans to safeguard employment (PSE) for The Hall for shoes and Vivarte Services, as well as sales of brands.
The plan of action presented by the CEO, Patrick Puy, provides for the merger of the seats of The Hall to the clothes and The Halle aux chaussures, the reorganization of Vivarte Services (the support functions of the group), the rationalisation of points of sale, and search of buyers for other retailers…
Tuesday, 24 January, a clarification should be made when the central committees of the company for the two Halls, media functions and also Andre, the representatives of the staff met with the leadership of the group to 10 hours.
The iconic shoe brand big risk. An assignment of the sign (750 employees) could be announced. Friday, 20 January already, rumours were rife about the name of a potential buyer. The name of Christopher Descours circulated. At the head of the EPI group, the owner of J. M. Weston and Bonpoint is none other than the grandson of Jean-Louis Descours, president of André from 1960 to 1996.
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2 000 additional posts deleted ?
The various committees convened on three days this week, should clarify the number of store closings in The Halle aux shoes (680 shops employ 3 900 employees) and provide information on the potential buyers of Kookaï, Chevignon and Pataugas, put on sale in 2016. The number of positions affected by the restructuring is expected to be announced on Tuesday 24 and Wednesday 25 January. The CFDT is concerned the removal of 2 000 additional posts.
If a PSE with a phase of voluntary departure has been announced on Monday for The Hall to shoes, the sale confirmed, in November 2016, of 132 stores could be increased. The unions, the more optimistic were talking about 150 shops and the most pessimistic of 200. Whatever the number, the future of the shops sold remains unclear… ” Only eighteen would have attracted interest from potential buyers, but no commitments to date “, points out Karim Cheboub, of the CGT.
the announcement of The merger of the two Halls was expected, but The Halle aux clothing (480 shops and 4 100 employees) is still in shock :
” After the loss of 250 stores and 1 500 employees in 2015 and in 2016, we do not think that the new ads would relate to this sign “, continues Mr. Cheboub.
the merger of The two seats could reduce by half the number of employees, according to the unions, which were presented on Monday a plan of action alternative to that of the direction.
What will happen to the group Vivarte (16 000 employees and a turnover of 2.2 billion euro) at the end of the decisions communicated this week ? Shop unique emaciated, a group refocused around a brand Minelli, San Marina, Besson, Naf Naf and Carroll. Not so simple…
The appointment of Sandrine Lilienfeld at the head of the brand Caroll queries as observers. The return in the group of the former president of Naf Naf, past chez Gérard Darel (placed into receivership in 2015), casts doubt on the intentions of the management with regard to the one of the only brands to have managed to rejuvenate its image and its offer in order to attract a new clientele of quadras.
in The news : Vivarte, a mode that does not pass
Debt to 1.3 billion euros
Even if inter wants to enjoy it to the end of the election period, the government’s position is clear. Yes, the group has touched 44 million euros from the State for 2014, including 14 million in 2016, the tax credit for competitiveness and employment, but Christophe Sirugue, secretary of State in charge of industry with the minister of the economy, has again reiterated its position to the national Assembly a fortnight ago.
It is not a question for Bercy to accompany companies whose sales of brands or stores are used solely to repay the creditors. All the more so when these former creditors become shareholders, as is the case for the group Vivarte.
In 2014, Oaktree, Alcentra, Babson, and GLG have agreed to make a cross on € 2 billion of debt in exchange for their ascent to the capital of the French group. These shareholders, who hold six of the nine seats on the board of directors, have rather interest to repay quickly, this is not exactly the case of the fund, Hayfin, or Anchorage, which have brought in 500 million euros of new debt to Vivarte. The two camps are not on the same wavelength, and any attempt to renegotiate a new debt appears, for the time, extremely complicated management of the group.
strategic Errors in series
Has this debt of 1.3 billion euros, that prevents the group to make the industrial and commercial investments required, in addition to other disabilities, which affect Vivarte since 2007, the date on which PAI Partners has sold its stake in the company to Chaterhouse for… € 3.2 billion.
The management has increased the strategic errors : the shift to digital has not been taken on time, the higher-end of The market, in terms of products and prices, has removed the customer of the brand… not to mention the succession of five chief executive officers in four years, which has not favoured the emergence of a long-term vision capable of reposition Vivarte in the face of competition from H&M, Inditex or Primark, and modernize the stores.
everything comes at a bleak context for the whole of the trade of the textile and clothing industry in France, department stores, traditional channels. Vivarte is not a special case and, despite the 70 % that currently have the windows of The Hall, the lack of activity in the store is obvious.
also Read : C & A, The Halle, Marks & Spencer… brands in traditional clothing are in crisis
This is the number of employees before the new restructuring plan, the terms of which will be clarified by Wednesday. The CFDT is concerned 2 000 job cuts.
€ 2.2 billion
This is the turnover in 2015-2016 (fiscal year ended in August), down 8% compared to the previous fiscal year.
This is the amount of the debt. Its repayment prevents the group from making the necessary investments.
44 million euros
This is the total aid received by Vivarte between 2014 and 2016 under the tax credit competitive employment.