Vivarte, which still owns several shoe retailing chains in France, asked its institutional shareholders on July 11 to refinance the group once more, or to write off their investments in the group and let its creditors take over its control. They have 15 days to make up their minds.

The main reason for the new scenario is that Vivarte will be unable to repay debts of €300 million by next October, as planned, due to its failure to obtain a satisfactory takeover offer for one of its major shoe retail chains, Minelli, whose 200-odd stores generated sales of more than €120 million in the financial year ended in August 2018. It has decided to keep it and to try to develop it internationally.

Vivarte's recent sale of the André shoe retail chain and other assets have generated proceeds of around €200 million. The company is confident that it will be able to sell two other shoe retail chains – San Marina and Cosmoparis – in the near future at acceptable conditions, but this will not be sufficient to repay all the outstanding debt.

La Halle, the group's chain of low-cost shoe and clothing stores, remains its biggest asset, with sales of €1.4 billion in the past year. It consists of 830 stores, 84 of which are now offering both shoes and apparel, but it suffered a drop in sales of about €30 million from the “yellow vests” demonstrations that have plagued the French economy since the end of last year. The number of stores offering both kinds of products may be further reduced to between 600 and 700.

Oaktree Capital Management and other investment funds acquired a controlling interest in Vivarte in 2014, converting loans into shares and injecting new equity that allowed the group to shed €2 billion in debt and so to reduce it to €524 million. If they write off their shares, they will lose a total of €460 million, and the other creditors of the group will acquire control.

Patrick Puy, who has led the group since 2017, has told the French financial daily Les Echos that such a scenario would be quite positive for Vivarte. With no debts left, it would be in a better position to invest in merchandising, logistics, e-commerce and internationalization.

In particular, Vivarte wants to develop La Halle in Eastern Europe and Africa. However, the chain's general manager, Philippe Thirache, left the group in May.