Friedrich Metzeler, the court-appointed receiver of the insolvent Garant Schuh + Mode, has confirmed his preference for a strategic investor as the new majority shareholder of the German buying group, but he and executives of Garant said they were in no hurry to make such a deal. The group’s profitability continues to improve, creating more value for the future owner. Meanwhile new initiatives are being launched, particularly in the sports segment, and the financial situation is being further secured.
A consortium of four lenders, led by Commerzbank, have agreed to provide financial support to a new interim investor, called Erste Amplificator, that will acquire a majority stake in Garant, probably in July, before transferring ownership to the new investor - possibly a buying group from the apparel sector or for other types of consumer goods.
Garant’s management would like such a strategic new investor to push Garant’s total central settlements back up to reach an annual volume of about €1.8 billion. Metzeler is setting up Erste Amplificator as an interim holding company supported by a group of four banks, led by Commerzbank, and backed up by a capital increase of €15 million
With a majority of more than 90 percent, but with only 44.5 percent of the equity represented at an extraordinary meeting, Garant’s current shareholders approved last month changes in Garant’s equity structure that will give Erste Amplificator a shareholding of 76 percent after an equity increase that will follow approval by the group’s creditors and by the insolvency court. This stake may be subsequently diluted by about 10 percent after another offer of new shares to the current shareholders, who are currently left with only 24 percent of the shares.
Garant’s present creditors will get back between 20 and 30 percent of their liabilities, and the new investor will then be able to inherit a clean balance sheet. At the GDS fair in Düsseldorf last month, the group announced an operating profit (EBIT) of more than €5 million for the year ended last Nov. 30. Central settlements increased by 7.5 percent to €724 million. They rose by 9.8 percent in Germany to €258.1 million and by 18.5 percent in the Netherlands to €202.0 million.
Meanwhile, Richard Brekelmans, the successful manager of Garant’s Dutch offshoot, is running an interesting new program to introduce in Germany the “Line Footwear” marketing and merchandising concept already tested in 38 shoe stores in his country. Under the concept, the participating retail members get all kinds of marketing and POS material to support the sale of 40 styles of men’s, women’s and children’s shoes purchased at special conditions from various brands.
As the Line Footwear concepts targets the whole family, Brekelmans has developed a story around it featuring an imaginary «Professor Umberto Lino,» a 63-year-old Italian expatriate living in Dûsseldorf who tells children about his travels around the world. The story will be illustrated through a game on the internet, caps, dolls and other giveaways.
Brekelmans remains in charge of Fair Play International Sports, the sports division of Garant, which has begun to export its successful format of specialized sporting goods stores from the Netherlands to Germany and Switzerland. In Germany, 11 sporting goods retailers have adopted the concept of a «Soccer Center» inside their stores, with products ordered through Fair Play.
In Switzerland, 12 retailers have agreed to start up a free-standing «Running Center,» again similar to those operated through Fair Play in Holland. Discussions have started with more than 30 retailers in Switzerland about the start-up of new «Snow Center» concept, involving ski rentals (more in Sporting Goods Intelligence Europe).