GALERIES IN DEAL TO BUY FRENCH M&S
Byline: Robert Murphy
PARIS — Groupe Galeries Lafayette, the French retailer, on Tuesday said it had reached an agreement to acquire Marks & Spencer’s 18 stores in France.
The deal with the embattled British retailer is subject to approval by M&S’s workers’ committee, expected to come by the end of the year. It will salvage about 1,500 jobs. “This is a fine agreement,” said Galeries Lafayette co-chairmen Philippe Houze and Philipe Lemoine in a statement. “We have utmost confidence in the ability of our team and in the Marks & Spencer team. Together, we will join forces to support each other and succeed in this challenge.”
Earlier this year, M&S said it would close all of its operations in continental Europe and the U.S., including its Brooks Bros. and King’s supermarkets divisions, as part of a radical restructuring plan.
The announcement drew immediate fire in France, M&S’s largest market outside the U.K. Socialist prime minister Lionel Jospin admonished M&S for informing the staff brusquely by e-mail, and ordered an investigation into whether the retailer had contravened France’s strict labor laws. Union leaders organized rallies and disgruntled workers blocked the entrance to certain stores.
Galeries Lafayette was the first to voice interest in M&S locations. It was soon joined by diversified retailer Pinault-Printemps-Redoute, controlled by Francois Pinault.
PPR dropped out of the bidding last week. Its interest in M&S was limited to only “certain locations,” while M&S said it would favor a bid for all the French stores. Meanwhile, an M&S spokesman in London said that no buyer had emerged for the four stores in Belgium and that they will be shuttered in December. Those units employed about 400 people.
M&S has already closed its two stores in Germany. But the fate of its nine stores in Spain, two in Portugal, two in the Netherlands and one in Luxembourg remains unclear. “There is still a possibility that we will find buyers for those stores,” said the spokesman.