PARIS – French retail group Vivarte said it is to offload its Spanish shoe chain Merkal and review the store network for its La Halle retail banner, “depending on the placement and profitability of outlets,” as part of its debt-restructuring strategy.
The proposed moves are part of a five-year recovery plan presented by the ailing French retail concern to its group committee on Wednesday. The strategy, according to a company statement, is hooked on three main axes: brand development, the digitalization of the group’s activities and international expansion.
This applies to Vivarte’s two areas of activity: centrally located stores, such as Caroll, Naf Naf, Minelli, San Marina and André, and retail operations positioned in France’s suburbs, including Besson and the La Halle clothing and footwear stores. The latter will possibly merge under one roof, focusing on the low-end segment “to appeal to the brand’s core family-oriented clientele,” the group said.
As reported, Vivarte recently appointed Hélène Bourbouloux as the ad hoc agent to renegotiate its debt of 1.5 billion euros, or $1.67 billion at current exchange, according to a spokesman for the company’s management, who asked not to be named.
Also among its latest management changes, the group in February tapped seasoned retail executive Stéphane Maquaire as chief executive officer, succeeding Richard Simonin.
Vivarte, which employs around 17,000 people in France, said it aims to implement the plan in a “responsible manner” in order to “limit the impact on jobs,” privileging takeovers. Vivarte set the estimated budget for the five-year strategy, which will involve the reviewing of platforms and modernization of stores, at 500 million euros, or $557.9 million.
According to reports, the moves will involve the shedding of around 100 of the group’s 680 La Halle aux Chaussures shoe stores. Battered by a volatile retail climate, Vivarte, whose cradle of more than 20 brands and retail banners also includes Kookaï and Chevignon for fashion and the footwear names Mosquitos and Pataugas, in 2015 was forced to lay off 1,481 employees at its various chains.
Vivarte’s creditors agreed in 2014 to cut its debt by 2 billion euros, or $2.5 billion at average exchange, and inject 500 million euros, or $634 million, of new money. In exchange, majority ownership of the group switched from Charterhouse Capital Partners to a group of lenders led by four funds: Oaktree, Alcentra, GoldenTree and Babson. According to a spokeswoman, the firm has since undergone a change in its ownership structure, with GLG Partners replacing GoldenTree.