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PARIS — Unions opposed to the sale of Printemps to a Qatari-based investment fund suffered a setback on Thursday when a French court rejected their bid to suspend the transaction pending additional information on management’s plans to reorganize the flagship store on Boulevard Haussmann in Paris.
This story first appeared in the August 9, 2013 issue of WWD. Subscribe Today.
The motion was filed before last week’s announcement that Qatari-backed investment fund Divine Investments SA, or Disa, had completed its acquisition of Printemps after receiving the green light from France’s Competition Authority.
The Luxembourg-based company, held by private investors, bought a 70 percent stake from Deutsche Bank’s Deutsche Asset & Wealth Management, previously known as RREEF, and the remaining 30 percent from Italy’s Borletti Group for a reported 1.75 billion euros, or $2.33 billion at current exchange.
RELATED STORY: Paris Prosecutor Probes Printemps Sale >>
In an audience before the Tribunal de Grande Instance de Paris on July 2, the retailer’s works council summoned Printemps, Disa and Borletti Group Finance to suspend the sale, arguing it needed additional details of a plan dubbed Arthur 3 that would involve a wide-ranging reorganization of the flagship.
Unions said they feared 226 sales staff could lose their jobs if the project went through.
In her ruling Thursday, magistrate Claire David rejected the demands directed at Printemps and ruled that those aimed at Borletti Group Finance and Disa were inadmissible. She ordered the works council to pay each of the defendants a sum of 2,500 euros, or $3,325 at current exchange, in addition to court costs.
Printemps chief executive officer Paolo de Cesare lauded the decision.
“It is very good news and it really confirms all the good work and transparent work we did during all this consultation,” he told WWD.
The executive criticized the unions for attempting to block the deal.
“It is an attitude that is not very constructive, and after six months of debate and discussion, I think there is a moment when the parties should be able to come to a decision and move on. And it’s a pity that we have to resort to the court to take a decision like this,” he said.
De Cesare revealed in May that the new owners had backed a five-year expansion plan, worth 270 million euros, or $359 million, which is expected to create 500 jobs. The retailer plans to open three Printemps stores, in addition to two units for its urban apparel chain Citadium, in the next few years.
The Qatari investors also pledged not to cut any jobs for two years, he said.
De Cesare said on Thursday that the leak of confidential internal documents regarding the flagship restructuring had done “significant damage” from a competitive standpoint, and he slammed union officials for discussing the project publicly.
“Frankly, it is very disappointing to see that they are using documents that are obtained in an illegal way and they are misinterpreting these documents and they are using them in the media forum and in the press to damage the reputation of the company,” he said.
Bernard Demarcq, spokesman for the Printemps labor unions, said the internal documents regarding the Arthur 3 plan were obtained by journalists who subsequently contacted union officials to help decipher their contents.
He called Thursday’s ruling disappointing, saying the works council had hoped a favorable response from the court would give it access to more detailed information regarding the identity of the buyer, the financial structure of the deal, planned future investments, strategy and jobs.
Unions do not plan to appeal the decision, according to Demarcq, who said they would focus instead on a separate probe launched by the Paris prosecutor’s office into the financial aspects of the sale, including any commissions paid.
“Our aim with this request was to be able to continue the consultation process. I think it would have lifted a number of questions and uncertainties on certain points. Well, that’s not going to happen, so now it will be up to the public prosecutor and his financial brigade to look at the case going forward,” he said.