AU BON MARCHE BUYS CONTROL OF FRANCK & FILS
Byline: Katherine Weisman
PARIS — Au Bon Marche, a key holding company of Bernard Arnault, has gained majority control of the Paris-based specialty store group Franck & Fils.
“We want to do with this store what we did at Le Bon Marché,” said Au Bon Marche president Pierre-Antoine Gailly, referring to the Left Bank department store going through a successful renovation and reorganization.
Gailly noted that the Franck & Fils flagship in Paris’s 16th Arondissment is considered an institution on Paris’s Western side, the same way Le Bon Marche is on the Left Bank.
“The store and its location, rue de Passy, have tremendous notoriety,” Gailly said. He added that the Franck & Fils name along with its nine branches in France, some wholly owned and some franchised, will be retained.
Franck & Fils is primarily a women’s fashion store, with a scattering of products for men and the home. Gailly said he wants to make it a specialty store focusing on men’s and women’s fashions.
Ultimately, Au Bon Marché hopes to acquire all of the Franck & Fils shares held by the Franck family who until now have been the store’s majority shareholders. But a feud among Franck family members has put that plan on hold.
According to a joint press statement issued Thursday from Pierre-Antoine Gailly, president of Au Bon Marché, and Claude Franck, president of Franck & Fils, Au Bon Marché acquired 75 percent of Mageody, a Franck family holding company with 51.8 percent of the shares of Franck & Fils. The stake was owned by Claude Franck, Anne Marie Dennys and Edith MacMorran. The remaining 25 percent in Mageody is owned by Claude’s brother, Gerard Franck, who, with his son Michel, is opposed to the transaction.
The remaining 48.2 percent of Franck & Fils shares outside of Mageody is mainly divided between one of Paris’s grandest families, the Guy-Aldonce de Rohan Chabot’s, and the Franck family.
Au Bon Marche also acquired the stakes of Claude Franck, Dennys and MacMorran in Franck & Fils. All told, Au Bon Marche holds directly — and indirectly, through Mageody — roughly 60 percent of the Franck & Fils group.
Last month, Au Bon Marché made an offer for the Franck family shares that valued the company at $37.7 million (200 million francs.)
According to Gailly, and David de Pariente of the Paris law firm U.G.G.C., who is representing the family members favorable to the transaction, all family members at first agreed to sell their shares.
Later, however, Gerard and Michel Franck changed their minds, wanting instead to develop some kind of partnership with France’s Dassault aviation and aerospace group, according to reports here.
Both Gerard, who had been president of Franck & Fils, and Michel, formerly a vice president, have left their positions.
At stake are the remaining shares in Mageody, which are held by father and son Gerard and Michel Franck, who had been actively running the company, and their shares along with those owned by the Rohan Chabot’s held outside Mageody.
The future of the Rohan Chabot-held shares is also up in the air. An agreement between Michel Franck and the Rohan Chabots was this month promising Rohan Chabot’s shares to Franck.
But, according to their attorney, the Rohan Chabots reneged when they learned that Michel Franck had offered them a deal without informing them of the Au Bon Marche transaction.
According to the lawyer, The Rohan Chabots were concerned that once Franck got their shares, he would sell them at a higher value to Au Bon Marche.
On Nov. 15, an emergency hearing was held before a judge in Paris’s High Court, where Au Bon Marche attorney’s demanded that Gerard and Michel Franck sell their shares to Au Bon Marche.
Michel Franck’s attorney asserted the Rohan Chabot’s were obligated to respect their October agreement with Michel Franck.