Galeries Lafayette: 26 Stores Owned by Michel Ohayon Receive a New Lifeline

Michel Ohayon, owner of 26 Galeries Lafayette branches, received a significant extension for his distressed stores on February 21, as approved by their main creditor - the Galeries Lafayette group itself. The business continuity plan for the said stores, which filed for protection the previous year, was endorsed by the group on the eve of the case's final hearing in the Bordeaux trade court.

Galeries Lafayette currently owns 19 branches and sold the aforementioned 26 to Ohayon between 2018 and 2021. "The group has agreed to the revised recovery plan proposed by Mr. Ohayon," said Stéphane Kadri, the attorney representing the employee committee of Hermione Retail, the majority owner of the 26 branches. While Galeries Lafayette declined to comment for this story, Kadri believes the group comprehends the stores' tough situation and is willing to provide them an opportunity.

Ohayon owes several tens of millions of euro to Galeries Lafayette, a debt that some say adds up to €153 million. Kadri suggested that Galeries Lafayette, as reported by AFP, will be giving up 70% of their credit claims with the understanding that the leftover 30% will be satisfied within a decade. At the same time, the stores' revenue growth projection has been minimised from 11% to 4%, something Kadri described as more realistic.

It appears that Hermione Retail's creditors and court-designated representatives are now supporting the plan. This provides temporary relief to Hermione Retail's 1,000 employees who are spread across their 26 Galeries Lafayette branches, predominantly situated in mid-sized French towns.

In the past two years, Ohayon's Hermione Retail was entangled with the liquidation of Camaïeu and the shuttering of Go Sport and Gap France. The Bordeaux court will deliver its decision on the revised continuity plan on March 20. (with AFP)