Coronavirus Covid-19: the André Shoe Brand in Receivership, 600 Jobs Threatened

Finance
The André shoe brand in receivership due to Coronavirus Covid-19

Already very affected by the yellow vests protests, the company has lost almost 4 million euros since the start of the coronavirus containment.

The shoe brand André, more than a century old, is the first French company victim of the coronavirus: it was placed in receivership after having had to close all its stores and lost nearly 4 million euros in fifteen days.

Purchased eighteen months ago by the online sales site Spartoo, the brand, which generated in 2019 a turnover of 100 million euros but suffered 10 million losses, has some 600 employees including l job is now threatened.


André filed for bankruptcy on March 23rd and the placement decision in receivership was validated Tuesday by the Commercial Court of Grenoble, where the headquarters of Spartoo is located, said Wednesday the CEO of the group Boris Saragaglia.

250,000 euros lost per day

“We are losing 250,000 euros a day in turnover” since the government decided to close non-essential shops “, explained Mr Saragaglia.

Since the acquisition of the brand by Spartoo, “we have suffered the” yellow vests “, with traffic down by 20 to 25%, “then, in the middle of the sales period in January, the strikes linked to the reform of pensions, ”and now the Coronavirus Covid-19 pandemic, said the CEO.

“A little air”

The company “anticipated” the problems linked to the coronavirus from the end of February by engaging in a conciliation procedure “to try to find some air”, he added, “unfortunately the net closure and franchise [outlets] precipitated ”the fall of André, created in 1896.

On Wednesday evening, another sign in the textile sector, Orchestra-Prémaman, announced that it also planned to place itself in receivership due to the “financial consequences of the unprecedented global health crisis linked to the Coronavirus Covid-19 virus, which has a significant impact on its activity in the regions where it operates ”.

Changing sector

In January 2018, when the sale of André had been announced, Spartoo, founded in 2006, undertook to take over all the stores, except one in Paris, as well as all the staff, and to maintain the brand whose the shops were to serve as a “click and collect” point for customers of the online sales site.

Its objective was to exploit “the full potential of André to create the only distribution group of significant size with a turnover divided equally between its network of physical stores and its internet activity”.

What Spartoo has done, said Wednesday Boris Saragaglia, touting the “unique industrial model in Europe” of his company, whose great rival is the German group Sarenza.

Alas, distribution has had to face multiple crises for several months: in addition to the various social movements, the sector has suffered a drastic drop in the consumption of new clothes and shoes, a clear tendency of consumers to turn to the second-hand market as well as fashion sneakers.


« Plan B »

Since July 2018, Boris Saragaglia explained that he had “invested 13 million euros in André, lowered prices, worked on the range by putting style and quality at the heart of priorities, and renovated stores”. But in vain.

“We had however returned in positive” at the beginning of 2020: then, “I tried to save André” last week “and I went to see the BPI” (Public Investment Bank) to ask them for a loan of 12 million d euros, said Saragaglia, but “they refused” to support the brand, “without giving an argument,” he said.

“After a while, you have to assume (state decisions, editor’s note), companies cannot get out of it”, he said, saying that this decision was “not fair” and also denouncing “unbalanced” relationships with lessors whose rents are growing disproportionately in the face of the drop in activity of the brands.

Before concluding: “it’s the worst nightmare but I want to fight, do my best to save jobs, find a plan B” and avoid liquidation.

Coronavirus Covid-19: the André Shoe Brand in Receivership, 600 Jobs Threatened 1

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