New and more severe restructuring measures are expected at Vivarte following the appointment of Patrick Puy as the new chief executive of the group, which is one of the two leading players in the French shoe retail market, along with Eram. It owns 14 different chains selling shoes or clothing under many different banners including André, Minelli, San Marina and La Halle aux Chaussures.
According to union sources, the new measures could include the shutdown of 55 André stores in the next five years, or one-third of its total network. The unions fear that Puy will “dismantle” the group because its operating earnings are insufficient to cope with its debts of €1.5 billion. There is hope that about half of them will be forgiven by mid-December.
Reputed to be an inflexible company doctor, Puy will be the fourth CEO of Vivarte in less than four years and the third to hold that position in 2016. He is supposed to run the group for at least one year. A former CEO of Moulinex, he has helped turn around other companies by selling off subsidiaries and dismissing employees. He takes the place of Stéphane Maquaire, the former CEO of the Monoprix chain of variety stores who was appointed Vivarte CEO in April. Maquaire replaced another company doctor, Richard Simonin, who had already eliminated 1,850 jobs at Vivarte, mostly at the group's apparel stores, after taking over the helm at the beginning of 2015.
Maquaire was dismissed on Oct. 27, apparently because of disagreements with the group's shareholders over the development of the business and the strategy to be followed in urban areas. He had formulated a business plan calling among other things for the sale or closure of 97 Halle aux Chaussures stores, which would have involved the elimination of 500 to 600 jobs.
The new CEO has indicated that the restructuring program proposed by his predecessor will be pursued. Maquaire had also proposed the sale of Merkal, the chain of 220 shoe shops owned by the group in Spain, but it's not clear whether the new CEO will endorse this aspect of the business plan.
Vivarte has already put up for sale its shoe manufacturing subsidiary, Compagnie Vosgienne de la Chaussure (CVC). Reportedly, it has received a takeover offer from a German investment fund that has proposed to keep its entire staff of 150 employees, considering the fact that one-third of them will retire within the next three years. The factory would be repositioned in a high segment of the shoe market, taking orders from many different clients.
Media reports indicate that several low-priced shoe stores trading under Vivarte's Halle aux Chaussures banner will be merged with those of La Halle aux Vêtements, Vivarte's low-cost apparel chain, as Maquaire had suggested. They would thus offer shoes and clothing under the same roof. According to union sources, another discount-oriented chain of shoe retail stores belonging to the group, Besson, may now undergo some restructuring as well.
At this stage, the management of Vivarte refuses to comment on the various reports. A statement from Vivarte simply states that Puy is expected to “accelerate the transformation of the group.