The once flourishing André chain of urban shoe shops, which has been struggling for several years, has been placed in insolvency proceedings, protecting it from its creditors. The lockdown of its 120 stores on March 16 because of the coronavirus outbreak was the final straw, as it lost nearly €4 million in a fortnight. Some 600 jobs are now threatened.
André filed for bankruptcy on March 23, and the decision to place the company under legal administration was validated on March 31 by the Commercial Court of Grenoble.
In an interesting new omni-channel strategy, Spartoo, the French e-commerce platform specializing in shoes and clothing, bought the shoe retail chain in 2018 from Vivarte. The multi-banner retail group, which was originally called André Group, has been divesting most of its 16 shoe and apparel retail chains in the past few years to reduce its debts.
Spartoo’s chief executive, Boris Saragaglia, said at a press conference that the bankruptcy is coming at a time when efforts to turn the business around were starting to bear fruit. The group has invested €13 million in André, lowered prices, focused on style and quality, and renovated the stores. As a result, its net losses, which amounted to €20 million in 2018, declined to €10 million in 2019. Revenues stood at around €100 million.
But the company was weakened in 2019 by the “yellow jackets” movement in France, as well as more strikes against pension reforms. In addition, André faced increased competition from online retailers, especially second-hand marketplaces such as Vintage.
Saragaglia said there is no certainty that the company will be able to reopen in the near future, as he was not able to raise money from investors or from the Public Investment Bank. Reportedly, the public French bank had been asked to give Spartoo a loan to help offset the negative impact of the coronavirus outbreak on André, but it refused to grant it because the chain’s financial problems had started before.
New plans for the takeover of André can still be presented to the court in the next few days.
The news of André’s bankruptcy came a month after Spartoo acquired Easy Peasy – an eco-friendly brand that makes baby booties – from the Noël group, which was put into liquidation in the autumn of 2019. In 2017, it also acquired GBB, the children’s business of the Kindy group.
Spartoo.com was launched in August 2016 in Grenoble by Saragaglia, Paul Lorne and Jérémie Touchard. Today, the French e-tailer generates annual revenues of about €250 million.