a new reprieve for the 26 stores owned by Michel Ohayon

There was a significant new twist on Wednesday February 21 in the case of the 26 Galeries Lafayette branches owned by Bordeaux businessman Michel Ohayon. The business continuity plan for the 26 stores, which had filed for a protection procedure in February 2023, has been endorsed by their main creditor, the Galeries Lafayette group itself, just ahead of the final hearing on the case at the Bordeaux trade court.

The Galeries Lafayette group, which still owns 19 stores and from which Ohayon bought the 26 branches in question between 2018 and 2021, “has accepted the recovery plan proposed by Mr Ohayon, which has been modified,” said Stéphane Kadri, before the in-camera hearing. Kadri is the attorney representing the employee committee of Hermione Retail, the company that owns the majority of the 26 stores.

Contacted by the AFP agency, Galeries Lafayette declined to comment and, according to Kadri, “is well aware of the stores’ extremely delicate predicament, though it is willing to give Hermione Retail a chance.” Ohayon owes the Galeries Lafayette group several tens of millions of euro, a sum totalling €153 million according to some sources.

According to AFP, Kadri stated that “Galeries Lafayette are waiving 70% of their credit claims, agreeing that the remaining 30% will be paid in 10 years, and also to review the commission rate in two years. At the same time, tonight, the growth forecast of [the stores’ revenue] has been cut from 11% to 4%. We said that 11% was unrealistic.”

According to Kadri, [Hermione Retail’s] creditors and court-appointed representatives are now favourable to the plan.

Hermione Retail has therefore been given a temporary reprieve, which the 1,000 employees of its 26 Galeries Lafayette branches, located mostly in medium-sized French towns, will welcome.

Ohayon’s name, through the same Hermione Retail company, has been associated in the last two years with the liquidation of Camaïeu and the closure of Go Sport and Gap France.

The Bordeaux court will rule on the revised continuity plan on March 20.

(with AFP)