The Commercial Court of Bordeaux is set to review the future of Michel Ohayon’s Galeries Lafayette stores on February 14. This comes after a delay in finalizing the continuity plan for approximately 20 Galeries Lafayette stores owned by Ohayon in the French provinces. The plan was submitted by Hermione Retail, the company responsible for overseeing most of the 26 stores that have been under safeguard proceedings since last February. These stores employ a total of 1000 employees.
During the review, the court will either approve or reject the plan submitted by Hermione Retail. If the plan is not approved, the court will also determine whether Hermione Retail will be placed under judicial reorganization. The decision heavily relies on the position taken by the Galeries Lafayette group, the principal creditor and main supplier of the stores owned by Hermione Retail.
Michel Ohayon acquired 22 stores from the family group in 2018 and an additional three stores in 2021. However, the continuity plan for these stores includes the sale of the Pau store and waiving 70% of the debts. Employees are concerned about the company’s promises of increased turnover and debt repayment, as they have witnessed declining turnover over the past four years.
Prior to the upcoming hearing, the judicial administrator expressed a negative opinion on continuing the business due to increasing liabilities despite the safeguard procedure. By the end of December, the company’s debts had reached 153 million euros.
In addition to the review of the continuity plan for Galeries Lafayette stores, the court will also assess the situation of Financière immobilière bordelaise (FIB), which is the main holding company of Michel Ohayon. FIB includes other textile brands like Camaïeu, Go Sport, and Gap France, some of which have been liquidated or sold in the past 18 months due to considerable indebtedness.
The court’s decision on February 14 will not only determine the future of Michel Ohayon’s Galeries Lafayette stores but will also shed light on the financial state of his other textile brands. Employees and stakeholders eagerly anticipate the court’s ruling.
Useful links:
1. Galeries Lafayette Official Website
2. Commercial Court of Bordeaux Official Website
