The new business plan of Vivarte, which has been endorsed by its shareholders and its creditors, calls for an increase in its total annual sales to around €4 billion in five years' time from last year's level of €3.3 billion. This should stem essentially from the opening of 1,000 new stores in France and abroad under its 24 different banners, but some of them may be franchised and others may be the result of acquisitions.

Vivarte currently runs a total of 4,700 stores. About half of them are shoe stores of various kinds trading in France under banners such as André, Beryl, Besson, Chaussland, La Halle aux Chaussures, Minelli and San Marina. It also owns the Fosco and Mercal chains of shoe shops in Spain. The company has been active in emerging markets such as China and Colombia with some of its apparel brands, such as Chevignon and Naf Naf, and it plans to be more active there.

The development of e-commerce will be another driver of Vivarte's growth over the next few years. Currently, the group generates sales of only around €20 million through this channel, but it wants the internet to represent about 5 percent of its total turnover by 2018, partly through a “click-and-mortar” mode that would involve its own physical stores and its franchises to pick up the merchandise after placing the order. It has already started to experiment with this method.

The new business plan is being steered by Antoine Metzger, a veteran of the group who has been acting as its secretary general since he joined it in 2000, after working for the Redcats mail-order and e-commerce subsidiary of PPR. As we have already reported, he took the place of Vivarte's former chief executive, Georges Plassat, who was made CEO of Carrefour at the end of last month. He already joined the giant retail group as chief operating officer at the beginning of April.

To help him out, Didier Couerbe, 44, was appointed deputy general manager of the group last month, with responsibility over finance, legal affairs, logistics, IT and purchasing. He took over Metzger's previous position in April. Couerbe had acted since 2008 as secretary general of Fnac, the big French chain of book, music and home electronics stores owned by PPR.

As reported extensively in our first issue of 2012, published on Jan. 13, Vivarte has been trying to convince its suppliers in China and other parts of the world to accept later payments in order to reduce its working capital and to raise its cash flow, in spite of a 15 percent operating margin (Ebitda) obtained in the last financial year, ended on Aug. 31, 2011. The group was in fact squeezed between a drop in sales over several months, due to unfavorable weather conditions and the poor economy, and the need to repay its high debt and to respect its loan covenants with the banks.

The new management of Vivarte has persuaded the banks to delay the reimbursement of most of its remaining debt of €2.5 billion, postponing the bulk of the process to a period between 2015 and 2018. Until then, the company will still have to show improved profitability ratios every quarter, but company officials indicated that this should give Vivarte more room to improve payment terms with its suppliers, especially those in Portugal and other parts of Europe that have been suffering the most from the recent financial crisis.

Company officials also confirmed that Charterhouse will continue to control the company in the short term. The British investment fund acquired a stake of 64 percent in the group in 2007 through a leveraged buyout that increased its debt load. Plassat will keep his 10 percent stake in the company. A similar amount is held by other managers who are still working for the group.

Observers feel that the new business plan will probably lead the group to go public again in the future, unless a big strategic investor comes up with an interesting takeover offer.