PARIS — Crippled by business lost due to the coronavirus shutdown, French apparel and accessories company Groupe Vivarte is seeking court protection for one of its key labels, La Halle, as it restructures the company’s debt and mulls a broader restructuring of activities.
Citing the sudden and prolonged interruption in activity as the country seeks to curb the spread of COVID-19, the group said it filed the procedure, which is similar to Chapter 11 proceedings, with the Paris commercial court Tribunal de Commerce for La Halle, which sells a wide range of accessibly priced shoes and clothing including suit jackets for 50 euros, T-shirts under 10 euros and high-heels for less than 30 euros.
Vivarte estimates a 106 million euro loss in sales for La Halle, between March 15 and May 11 — the date currently set for the gradual easing of lockdown measures in France.
Business will continue “normally,” the group said, resuming after lockdown measures lift and maintaining jobs, but it will suspend debt payments as well as a plan set out in February to save employment at the brand’s headquarters and a logistics center in Issoudun, France.
Vivarte’s other labels, including Carol and Minelli will not be affected by the move, the group added.
Vivarte has struggled to find its footing in recent years, significantly scaling back its brands from more than a dozen to just a handful. The debt-laden group was thrust into the political spotlight during the French presidential elections in 2017, with politicians calling for protectionist measures to maintain jobs at the ailing conglomerate that had owned well-known labels like Naf Naf, Chevignon, San Marina and Kookaï.
One of the labels it sold in 2018, the century-old French shoe brand André, filed for bankruptcy proceedings earlier this month. The current owner, e-commerce site Spartoo had invested 13 million euros in the label last year, seeking to turn the business around by beefing up Internet sales and revamping its retail sites while lowering prices and improving quality and style. The sudden store closures cut the efforts short, and the company failed to secure additional financing while it was losing 250,000 euros a day.
France’s retail sector had already suffered a series of blows before COVID-19 struck and prompted the shutdown of all nonessential commerce in the country. Yellow vest protests that started in 2018 became violent, closing down city centers across the country, and then pension reform protests flared up last year during the crucial holiday shopping period.
In 2018, Vivarte said it planned to invest 100 million euros over three years in La Halle and 10 million euros this year in its other main brand Caroll, accelerating their digital development, launching concept stores and developing abroad.
La Halle generated 847 million euros in sales last year, noting initial signs that turnaround efforts were paying off, with a 2.5 percent increase in clothing, outpacing the overall apparel market which was down in France.
The company counts 860 stores in France and 6,000 employees.