Fashion retailer Vivarte undergoes restructuring, major stir about CEO's severance package

Fashion retailer Vivarte undergoes restructuring, major stir about CEO's severance package

French fashion concern Vivarte wants to cut 1,600 jobs, mainly at its clothing chain La Halle aux Vêtements. At the same time, a major stir surrounds the severance package its former CEO - Marc Lelandais - received last October.

Nearly 1 in 3 clothing stores will close

Vivarte - which owns chains like Naf Naf, Chevignon and Kookaï - will cut 1,600 jobs out of the 17,000 it currently has. One of its most important chains, La Halle aux Vêtements, will carry the brunt of the cuts: 174 of its 620 stores will shut down and another 23 will be sold off. Its staff will be brought down from 4,000 to 2,480 employees, which means that nearly a third of the staff will be shown the door.

 

Shoe chain André will also have to make some changes: 37 out of 247 stores will close and 200 out of 500 employees might lose their job, while Kookaï may be forced to let 32 people go.

 

The French fashion concern has had worrying results, which have prompted it to act now: Vivarte's turnover slumped 10.3 % in its 2013-2014 fiscal year, down to 2.68 billion euro, while its debt grew to 2.8 billion euro. La Halle aux Vêtements' sales dropped for the third year in a row, with a 60 million loss on a 560 million euro turnover last year. Its major competitors, Kiabi and mainly Primark, are stealing away customers and turnover.

 

Back to discount

CEO Richard Simonin, who took charge in October 2014, wants to bring the company back to discount prices once the huge restructuring program has been finalized. That move would also signal the end of his predecessor's heritage. In 2012, Marc Lelandais took over from Georges Plassat (heading to Carrefour) and decided to move Vivarte into a higher echelon of the market, a move that has backfired tremendously.

 

Lelandais' severance package has now caused quite some turmoil in France, as he has allegedly received 3 million euro at his departure in October 2014, according to French paper Le Parisien. The former CEO fervently denied the sum, when asked by Le Monde: "The document is erroneous and the amount is not what I received as a severance package", he said. He did not divulge how much he did in fact get...

Tags: