Belgian fashion group FNG has no intentions to take over its local competitor e5 mode, and the recent commercial partnership between the two is no stepping stone. That is FNG’s message in a press release, which however raises more questions than it answers.
Collaboration
Last week news broke that Feniks Holding, a company owned by entrepreneur Frédéric Helderweirt, had acquired fashion chain e5 mode, but several observers expressed the suspicion that this transaction was only the prelude to FNG’s eventual takeover of e5 mode. They saw several clues.
First of all, Helderweirt had worked for FNG until recently: for several years, he was responsible for the transformation of the Brantano shoe stores. The hypothesis arose that he now was sent ahead to restructure the loss-making e5 mode chain and make it ready for an acquisition. A similar scenario occurred a few years ago, when FNG CEO Dieter Penninckx personally took over that very same Brantano chain in order to sell it to FNG after a clean-up operation. The announcement that FNG and e5 mode would work closely together in the field of procurement only fuelled these suspicions.
“No intention of acquisition”
As a result of these speculations, trading in FNG shares was suspended last Thursday, pending a press release. That was finally published only four days later, and said: “Contrary to the reports in certain media in recent days, no agreement has been concluded between Feniks Holding BV and the FNG group to purchase the shares of e5 mode (at a later stage). At the moment, FNG NV does not intend to take over the shares of e5 mode”, it says.
However, the company confirms that e5 mode will start using FNG’s purchasing platform, which has been active in various regions and has offices in Turkey, India and China for years. Penninckx stresses that his platform is also open to other parties: “We are reaching out to other Benelux fashion & shoe retailers, making local players stronger.” Production for third parties already accounts for about 15 % of activities.
Troubled waters
Whether this press release provides a satisfactory answer to the many questions and suspicions currently circulating the market is questionable. FNG has grown particularly rapidly in recent years through – sometimes risky – takeovers and is currently in troubled waters. The recent acquisition of the Scandinavian e-commerce player Ellos received a lot of criticism from analysts: they pointed out a lack of clarity about funding and also questioned the promised level of synergies.
A little later, FNG rearranged its board of directors: chairman Eric Verbaere and CFO Nico Bondroit resigned, Roald Borré became the new chairman. The switch had nothing to do with the earlier criticism of the acquisition of Ellos, the group pointed out. The company also recently announced that the majority of Promiss and Steps’ Dutch stores will close this spring, to fully commit to a ‘digital first’ strategy.
