The French giant of decorations and low-cost goods is experiencing a slowdown in its activity and wants to renegotiate its debt with Bercy’s support.
A success story that’s happening? The activity of Giphy, the French giant of low-cost decoration (600 points of sale, 6,800 employees, 1.3 billion euros in revenue last year) is now slowing down.
The reason was a painful IT migration last June to a new ERP tool: a type of software used to manage the day-to-day activities of companies such as accounting, purchasing, etc.
This complicated migration led to loss of turnover especially due to missing or incorrectly delivered products to stores.
The information disclosed by Le Monde was confirmed by the spokesperson of the group BFM Business.
The difficult integration of the new system caused numerous internal structural problems (inspection results, stock and supply difficulties) and affected store turnover in the second half of 2023, it is explained. Cash flow has also been affected.
Although these integration issues are yet to be resolved, we assure the brand side that it is considering the possibility of seeking a penalty from its supplier.
The scale of the results since Giffy approached the Bursey entity, the Inter-Ministerial Committee for Industrial Restructuring, is not trivial. This includes getting support from the state in its ongoing discussions with banks to restructure its debt, part of which is guaranteed by the state.
In an email, Philippe Genestat, Giphy’s founder and boss, wanted to offer reassurance, however.
“Geephy It is a resilient company that has always been profitable and has weathered all the successive crises our country has faced since the Covid years. 2023 will be an important year for the brand: we have taken advantage of the challenges to relaunch a new dynamic for the group due to the complex implementation of the new ERP. Even if we are still waiting for significant reimbursement payments from our insurers linked to Covid, we are more than ever the leading ‘smart purchasing’ brand in France”, he explains.
The distributor also highlights the good health of the discount sector with 10% growth in 2023 (according to Zerfi). However, if the pie grows, competition increases with powerful players such as Action, Normal or Nose taking significant market share.
But Giffy comes up with a new plan for victory. “We are going to strengthen (our offer, editor’s note) with a complementary network in Ile-de-France of 16 stores and a new product range,” adds Philippe Genestat.
The group also intends to be more aggressive on pricing (its suppliers will have to make an effort), and open more stores in city centres. From the end of the first quarter, 16 Bricolex stores will come under the Gifi flag in Paris and its surrounding suburbs.
Finally, Giphy wants to strengthen its international presence, it is already present in 15 countries.
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