Vivarte’s restructuring plan culminates with exit of third CEO in four years

What’s going on at Vivarte? The multi-brand French fashion group is in the spotlight these days after announcing the completion of its restructuring plan ... which culminates with the departure of the executive who has been responsible for carrying it out, the hitherto CEO Stéphane Maquaire.

Maquaire was the third CEO that the parent group to La Halle, Merkal Footwear and Kookai brands has had in the last four years. He has been replaced by Patrick Puy, who, according to company’s sources who preferred to remain anonymous, has come to "dismember the group", aimed at helping mutual fund company owners to recover their initial investments of 500 million euros, as well as the interest generated in these years.

Union sources quoted by leading French media highlight that the departure of Maquaire has nothing but added preoccupation to the already concerned employees of Vivarte, who have witnessed this never ending parade of first executives since 2012, reviving fears of a potential decommissioning.

Marc Lelandais wasthe first in taking this bumpy road when he took over as CEO of Vivarte, right on time for the restructuring and to be expelled shortly after the end of the operation. He was replaced by Richard Simonin, formerly at Givenchy, who oversaw a drastic reduction in both personal and the number of stores. Restructuring apparently left shareholders dissatisfied, allegedly prompting more changes at the helm of the group. To everyone's surprise, in April this year, Stéphane Maquaire, president of Monoprix since 2010, took over the reins of Vivarte.

Four CEOs in less than four years

In August 2014 twelve investment funds, including four of the major shareholders of Vivarte - Oaktree Alcentra, Babson and Golden Tree - entered the capital of the company by buying back debt (after suspending trading on the stock exchange) from the 116 creditors of the group (about 2.8 million euros). The new owners promised to put on the table 500 million euros to close the growing hole in the accounts of Vivarte and revitalise their sales.

Patrick Puy, as the company stressed in a statement issued earlier this week, brings "significant experience in early business recovery.” The fashion group also explained that "his mission is to accelerate the transformation of the group, to give a strong overall boost and to lead the quick change on operations," said the document.

It’s worth recalling that in July, Vivarte relaunched its financial restructuring process with the collaboration of the Commercial Court of Paris. According to 'Les Echos', a divergence of opinion arose among the fund's shareholders Oaktree, Babson, GLG and Alcentra, who want to accelerate the restructuring of the company, and Maquaire.

Last September, Vivarte, which employs 17,000 people in France, unveiled a strategic plan to be unfolded over the next five years and mobilise funding of 500 million euros, and announced that it had initiated talks with creditors to achieve a net reduction of debt in early 2017.

In addition, Vivarte made public its intention to sell a hundred of its La Halle aux Chaussures stores, plus another several hundred of its other brands. The group had previously announced the closure of the vast majority of its Merkal Footwear chain in Spain.

Foto:La Halle