Fnac Darty is the first large French company to receive state aid to weather the coronavirus crisis. The electronics and multimedia group borrowed half a billion euros with a state guarantee.
Preparing for relaunch
Fnac Darty receives 500 million euros from various banks, secured by the French government. The loan should safeguard the group’s liquidity and enable it to prepare for the store re-openings, according to the newspaper L’Obs. All of the group’s physical stores have been closed in Belgium, France, Spain and Switzerland since mid-March.
The group has also made “preventive” use of a revolving credit line of 400 million euros and ensures that it is “determined” to pursue a long-term relationship of trust with its suppliers. CEO Enrique Martinez also gives up 25 % of his salary during the crisis, while other members of the executive committee see their fixed remuneration reduced by 15 %.
30 % reduction in turnover
Although Fnac Darty is the first major French company to have recourse to State aid during the corona pandemic, it will certainly not be the last. The French government has undertaken to guarantee 300 billion euros in business loans, and Air France and Renault have already expressed an interest to make use of it. In the case of Fnac Darty, the government is offering a 70 % guarantee on the loan, which was issued by a group of banks for one year (with an option to extend it to five years). The banks themselves cover 30 % of the amount.
Fnac Darty’s turnover fell by 7.9 % to 1.49 billion euros between January and March, but sales plummeted by 30 % in the past month. However, online sales doubled in the last two weeks of March and at the beginning of April. The group will not be able to meet its financial targets for 2020, it already said earlier.
