PARIS — As the financial pain inflicted by the coronavirus continues to grow, a French court has opened bankruptcy proceedings for a century-old shoe label, André, upending its owner’s bet on an e-commerce and bricks-and-mortar combination.
“Our company will do as much as possible to fight to save jobs and come up with a plan B to avoid the liquidation of André in this unusual context,” its owner, e-commerce operator Spartoo, said in a statement.
A commercial court in Grenoble, France, kicked off the proceedings on March 31, a couple weeks after officials ordered store closures across the country to stem the spread of COVID-19.
André operates 150 boutiques and lost 250,000 euros a day, leading to a 4 million euro loss over a 15-day stretch of store closures.
E-commerce site Spartoo bought the struggling shoe company in 2018 from Vivarte and last year invested 13 million euros in a bid to turn the business around, seeking to bulk up Internet sales while revamping retails sites, lowering prices and focusing on quality and style.
The goal was to create a sizable European shoe retailer with sales generated equally from stores and the Internet, according to chief executive officer Boris Saragaglia. The e-tailer added other shoe labels to André’s web site, as well as to tablets used in stores, which also served as click-and-collect points for Spartoo customers.
Carrying the slogan “all of fashion at your feet,” André sells shoes ranging from sandals priced at 40 euros to anklet boots costing around 90 euros, and also offers high heels, dressy men’s loafers and fashion sneakers.
The efforts were beginning to bear fruit, according to the company, which flagged an improved performance over the past six months, but this was cut short by the sudden store closures, and a request for around 10 million euros in financing from state-owned Banque Publique d’Investissement was turned down.
The French government has stepped in with hefty aid packages to help companies weather the current crisis, but the economic impact has hit hard and fast. The country’s statistics agency INSEED, observed a 35 percent drop in consumption, and estimates a month of confinement will shave 3 percentage points off of the country’s annual GDP. Online commerce has not proved to be the economic lifeline many were hoping for, with consumers and delivery companies focusing on food, health-care supplies and equipment for working at home.
France’s retail sector was already weakened by a series of disruptions before COVID-19 struck, prompting the shutdown of all nonessential commerce in the country. Yellow vest protests that began in 2018 took extremely violent turns, shutting city centers across the country, and then came last year’s pension reform protests, which flared up during the crucial end-of-year shopping period.