Vivarte raises La Halle on fashion at low prices
Under the leadership of a former Kiabi leader, the clothing and footwear brand hopes to reconquer its historical clientele. In the heart of the summer, 135 stores were closed.
Vivarte enters the heart of the matter. The French group presented on Wednesday 6 September the strategy to relaunch its clothing and footwear brand La Halle. The first of its subsidiaries, ahead of Caroll, San Marina, André and Naf-Naf, is expected to release “strategic zigzags” in 2014 and 2015 to “reach a turnover of 1.2 billion euros (Compared to € 1 billion in the financial year 2016-2017, ending at the end of August) and to generate € 100 million in operating income by 2020, explains Philippe Thirache, a former Kiabi the presidency of La Halle eight months ago.
This re-launch follows a broad restructuring plan. In the heart of the summer, the group signed the closing of 135 loss-making stores operated under the La Halle Chaussures brand, resulting in the abolition of 451 jobs. Only 48 of these stores have been taken over by retailers, including the Lidl supermarkets, Dutch dealer Action and the Maisons du Monde decoration chain.
“Lower our prices by 25%”
Federated under a single banner – La Halle -, the 871 fashion and shoe stores must compete better with Kiabi, the fashion champion at low prices in France. “We will reduce our prices by 25% over the next two years,” assures Mr. Thirache. The brand hopes to catch up with women who had abandoned it as a result of price increases and partnerships with singer Jenifer or basketball player Tony Parker. Ballerinas at 9 euros and jeans at 7 euros will be particularly notable in the children’s department.
La Halle will be allocated 100 million euros of budget over the next three years to renovate 50 stores per year, sign advertising campaigns and win over the Internet, where it only realizes 2% of its sales. The first measures implemented in 2015 by a new management and style team would already bear fruit. According to Mr Thirache, La Halle fashion stores posted sales growth of 5% over the last financial year on a like-for-like basis, after 8% in 2015-2016.
Reconnect with store openings
The group also intends to renew very quickly with the openings of store, marotte of the companies bought back in leveraged buy-out (LBO, “leveraged buyout”). This strategy, which allows a firm to generate cash to repay the amount of its debt should resume in 2018 and 2019 at the inauguration of some fifteen stores.
Meanwhile, Vivarte is expected to have signed the sale of André (786 employees), Naf-Naf (860 employees) and Chevignon. The group, riddled with debts for years, has already shed Kookaï and Pataugas: the fashion label was sold to the Australian group Maggi in July, while the scout brand was sold in May the SME Aixoise Hopps Group.
In May, the group’s 172 creditors agreed to give up 846 million euros of credit, bringing its debt to about 600 million, on the basis of this disposal strategy. At the end of this process, Vivarte (2.2 billion euros in turnover in 2016) will only operate six brands, La Halle and Besson, on the outskirts of the cities, and Caroll, San Marina, CosmoParis and Minelli in their centers.