ARNAULT SETS HIS SIGHTS ON BUYING FRANCK & FILSByline: Godfrey DeenyPARIS--Bernard Arnault is trying to buy Franck & Fils, a small French retail chain best known for its tony flagship store here.According to a document filed with the Commission des Operations des Bourses for a planned public tender offer by the Arnault holding company Financiere Agache, the financier has held talks with key members of the Franck family about buying a majority stake in the fashion retailer."It's true we are in discussions with the Arnault group. Nothing has been signed yet, but the talks are at an advanced stage," said a Franck & Fils spokeswoman Wednesday.But some Franck family members reportedly consider the offer Arnault has put on the table too cheap.A spokeswoman for LVMH Moet Hennessy Louis Vuitton, the huge luxury goods firm of which Arnault is president and majority shareholder, declined to comment on the talks with Franck & Fils. Arnault already has significant retail interests, including Au Bon Marche, the Left Bank department store here, as well as Louis Vuitton, Christian Dior, Christian Lacroix, Kenzo, Givenchy and Céline shops.Franck & Fils, which is fully controlled by the Franck family, has suffered through the recent economic downturn in Europe. Its main store in Paris, in the wealthy western neighborhood of Passy, has lost money for three years.Obligatory filings with the commercial court here show the 220,000 square-foot store lost $960,000 (4.9 million francs) in 1991, $1.9 million (9.7 million francs) in 1992 and $2.3 million (11.7 million francs) last year. Revenues have also dropped steadily, from $37.8 million (192.6 million francs) in 1991 to $35.7 million (182 million francs) in 1992 and $35.6 million (181.5 million francs) last year. The group has sold two Paris stores in Les Halles and Montparnasse in the last two years but still owns units in Lille, Nantes and Lyon, which apparently are profitable.However, the Paris flagship accounts for about 80 percent of group turnover. Arnault is believed to have made an offer of 10,000 francs per square meter (roughly $200 per square foot) for the Passy store, valuing the flagship at about $43.5 million. The Franck family is believed to have balked at that offer, which is below current market rates for Paris commercial property and rumored to be considerably less than the price offered by Britain's Virgin Records a few years ago.
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