PARIS – Contrary to an earlier interview of French businessman Michel Ohayon, the 26 Galeries Lafayette franchises owned by Hermione People & Brands will be placed under safeguard proceedings.
On Friday, the embattled businessman had told French regional newspaper Sud Ouest that while the “situation is healthy,” the Galeries Lafayette retail franchise would be placed under receivership “to protect [it] from any attacks.”
A spokesperson for the businessman told the AFP on Saturday that this was “an error” and that “a petition to for safeguard proceedings at the commercial court in Bordeaux” had been filed on Friday and that there was “no defaulting on payments.”
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The ‘safeguard’ status will allow Hermione People & Brands to negotiate a restructuring plan under the court’s direction.
The interview had been published following a court hearing in the southern French city of Bordeaux that saw Ohayon’s retail property investment and development group Financière Immobilière Bordelaise go into receivership earlier in the week.
Financière Immobilière Bordelaise, or FIB Group, is involved in high-end hotels and wine production. It is the owner of properties such as the Sheraton hotel at Paris’ Charles-de-Gaulle airport, the Waldorf Astoria Trianon Palace in Versailles and the Grand Hôtel de Bordeaux, operated by the IHG hospitality group.
The three holding companies that own the hotel premises were placed into administration by the Bordeaux commercial court for defaulting on a 201-million-euro loan from Bank of China to finance these acquisitions “from the first instalments of the funding plan.”
In 2018, FIB’s retail arm Hermione People & Brands had bought an initial 22 stores across France, grouped and operated under the Hermione Retail umbrella. Most recently, it took over a further French three stores and an outlet, following the Galeries Lafayette Group’s decision to push further into the franchise model in 2021.
This is a fresh blow for the embattled group and its HPB retail arm. The 2022 bankruptcy of high street retailer Camaïeu, resulting in the closure of over 500 stores across France and the loss of some 2,600 jobs, had created a country-wide furor.
In January, it placed sports equipment store chain Go Sport under receivership and there are indications that Gap France, the entity born from the 2021 purchase of Gap’s activities in France and operating its French stores under a franchise agreement, could follow suit in the short term.
Mounting concerns saw employees of the 26 Galeries Lafayette impacted stores stage walkouts on Tuesday, to protest the lack of transparency on the financial situation of Hermione Retail, where several stores are said to be in “great difficulties” according to AFP reports.
In response, Hermione People & Brands had told the French news agency that “no layoff plan or store closure is programmed at Hermione Retail,” adding that “the company is healthy, supported by a marketing strategy that demonstrated its pertinence,” and a 2022 turnover “rising 4.1 percent and January sales “rising 9.8 percent” against the same period last year.