What is the future of 26 Galeries Lafayette owned by Michelle Ohio and the thousand employees who work there? The Bordeaux Commercial Court examined the case this Wednesday, while the stores are A backup is placed in the process. A plan was proposed by a Bordeaux businessman. The court will study it and give its decision on March 20. The plan to continue the activity of the 26 stores in question was supported by its main creditor Galeries Lafayette group.
Me Stephan Qadri, a lawyer for the Central Social and Economic Committee (CSEC) of Hermione Retail, which oversees most of the 26 stores, indicated to the press before the hearing that the Galeries Lafayette group, from which Michel Ohio bought the brands in 2018. and 2021, “Adopted the safeguard plan proposed by Mr. Ohioan, as modified.”
Galerie Lafayette renounces much of what it owes Michel Ohioan
Galeries Lafayette and Michel Ohion have therefore reached an agreement to present at the Bordeaux Commercial Court: the brand forgives 70% of the debt accumulated by the businessman. He must in fact pay a portion of his turnover every month according to the principle of deductibles. And It is committed to modernizing stores and introducing new brands to increase sales. A total of 25 jobs will be eliminated in administration, but about a thousand will be saved in stores.
“Galerie Lafayette gives up 70% of its receivables (Liabilities reached 153 million euros at the end of 2023 according to the unions)Accept that the remaining 30% will be paid in 10 years to review the commission rate in two years”, detailed Me Stephan Kadri, according to whom all creditors and agents now support the plan to continue. The forecast for activity growth in 2024 has also been reduced from 11% to 4%.
A highly fragmented workforce
It’s a semi-victory for the staff, who had hoped for a future without Michelle Ohio: “He has never kept his promises in five yearsWhy would he start now?” one of them asks. Many believe that these short-term rescues do not in any way guarantee the future of these stores in the long term, which incur huge losses every year.
Mitchell Ohio has purchased a number of textile brands in recent years, including Camaiu, liquidated in September 2022. Due to major financial difficulties, the businessman had to sell Go Sport and Gap France.
26 shops have been affected
26 stores affected by the process in Agen, Amiens, Angoulême, Bayonne, Beauvais, Belfort, Besançon, Caen, Cannes, Chalon-sur-Saône, Chambéry, Dax, La Roche-sur-Yon, La Rochelle, a total of 1,000 employees. Libourne, Lorient, Montauban, Niort, Rouen, Saintes, Tarbes and Toulon, as well as Tours, Pau, Rosny-sous-Bois and Coquelles near Calais.
Galeries Lafayette directly operates 19 stores in France, including the historic store on Boulevard Haussmann in Paris; In addition to Michel Ohio’s 26, another 13 are operated by Société des Grands Magasins or local entrepreneurs.
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