GALERIES LAFAYETTE DENIES IT’S FOR SALE AS STOCK CHURNS
Byline: Katherine Weisman
PARIS — Galeries Lafayette is not for sale. That’s the official position of this legendary French department store group, whose flagship sits on the Boulevard Haussmann shopping street.
The retailer’s shares have been trading wildly of late, closing down 4.28 percent to $154.65 Monday. This follows a 10 percent jump in closing share price last Thursday, a record trading day on the Paris Bourse, followed by a near 5 percent drop on Friday. The trading speculation was attributed to rumors of a takeover by rival group Pinault-Printemps-Redoute.
“We’re not in the habit of commenting on rumors that are absurd,” was the statement issued by Galeries management through a spokeswoman.
A spokeswoman for PPR had the same reaction, noting that the group has a policy of not commenting on rumors.
To observers on the Paris retail scene, the idea of a PPR bid does seem far-fetched. Two women of the Meyer and Moulin families, which helped build Galeries this century, own 68 percent of the shares and just over 74 percent of the voting rights, and they have no plans to sell, said the Galeries spokeswoman.
They are Noelle Meyer, the widow of former Galeries chairman Georges Meyer, and Ginette Moulin, the wife of Etienne Moulin, who is president of the supervisory board for Galeries-owned variety store chains Prisunic and Monoprix. Ginette Moulin is also the daughter of Max Heilbronn, who was president of Galeries from 1950 to 1971. At this level of control, a hostile bid is pretty much impossible, observers said.
In addition to the controlling shareholders’ unwillingness to sell, Muriel Pailhous of French bank Credit Lyonnais questioned the importance of department store retailing to PPR, given that sales at PPR-owned chain Printemps are “so small compared with the overall size of the group.” Last year, Printemps had sales of $769.2 million, whereas PPR group sales totaled $16.7 billion.
Last year PPR sold the Prisunic variety store chain to Galeries, which owns Prisunic rival Monoprix, following PPR’s unsuccessful bid for Monoprix. And it’s doubtful that a PPR purchase of Galeries would pass an antimonopoly check by European authorities, observers noted.
Some are attributing the heavy trading in Galeries shares to the fact that they have been undervalued and that now “people are rediscovering some of the group’s fundamentals,” said Pailhous.