Major restructuring in sight at Conforama

The distributor is put up for sale by its shareholder Steinhoff. Conforama is preparing for about 2,000 cuts. Bercy took over the case.

Conforama will be one of this year’s major industrial projects. The furniture retailer is heading for a massive restructuring. It has been for sale for six months by its owner Steinhoff. The investment bank Rothschild is handling the sale, which should be completed this summer. The South African group hopes to recover between 600 and 700 million euros from Conforama. A price that is difficult to achieve in light of the performance of the group, which had “zero margin at the end of 2018” according to a competitor who has received the company’s accounts. Especially since the French activities, which weigh two-thirds of Conforama, lost more than 100 million euros last year. The cheap furniture brand suffers from Ikea and e-commerce. But Steinhoff justifies his ambitions with the value of the walls of the 337 Conforama stores, located mainly in France, Spain and Switzerland.

Steinhoff is under pressure from its creditors as multi-billion euro accounting irregularities have been observed over several years. The South African group supports 10 billion euros in debt, which hedge funds have partly bought to take control and split the group. The US (Mattress) and British (Poundland) subsidiaries have already undergone major restructuring, while the Austrian activities have been sold.

Forty stores closed

They are now attacking Conforama. The creditors’ representative, Helen Lee-Bouygues, visited the company’s headquarters last fall and even visited the Colombes site. The Ministry of Economy, aware of its difficulties, is following the matter closely through the Interministerial Committee on Industrial Restructuring (Ciri), a proof that the case is heavy. According to our information, representatives of “Ciri” went to London a few weeks ago to meet Steinhoff’s creditors and negotiate the terms of Conforama’s restructuring. The South African group is planning up to 2,500 cuts and about 40 store closures. The French unions estimate that “between 1,500 and 2,000 jobs would be threatened, a large proportion of them in France, for about twenty shops sold or closed in France”, according to a workers’ representative. Conforama has 14,000 employees in Europe, of which 9,000 in France.

A significant restructuring, the extent of which will depend on the buyer. According to several sources, several Conforama competitors were approached last fall. With mixed success. Only his big rival Men would be interested and would be a favorite. Employees fear this opportunity, which will lead to a massive restructuring, as the two brands are in direct competition. The Danish Competition Authority would also impose many resales of shops.

Steinhoff ready to restructure Conforama

Two other rivals remain: Fnac Darty and Casino. The two groups have studied the case but do not seem convinced. First, Fnac Darty worked seriously on the topic last fall. First seduced, he finally gave up, explains a close friend of the group, for the moment … Strengthening his position in household appliances was the main interest of his Darty brand. But “furniture is a market that is too ruined and the Conforama brand is a notch below,” explains a close friend of the group. Not to mention the too many outlets.

Same observation at Casino, explains the management of the group. However, its e-commerce subsidiary CDiscount seemed interested. They already have a common mall with Conforama, Mano, in the field of home appliances. A merger would have made it possible to create more synergies and to integrate small “Confo!”, The brand’s new concept, into Casino hypermarkets. assets to be sold to reduce debt.

Still, Steinhoff has little chance of achieving the bid price. According to several sources, “if the price is too low, the South African group can keep Conforama and restructure it itself before selling it again” assures a good connoisseur of the file. At present, no information is communicated internally. Contacted, Steinhoff and Conforama did not want to answer us. Details are expected at the end of March, during the holding of an Extraordinary Central Cooperation Committee (CCE).

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