Major restructuring in sight at Conforama

The distributor is offered for sale by its shareholder Steinhoff. Conforama is preparing for approximately 2,000 job losses. Bercy took over the file.

Conforama will be one of the major industrial projects of the year. The furniture distributor is heading for a major restructuring. It has been on sale for half a year by the owner Steinhoff. Rothschild investment bank is settling the sale, which should be completed this summer. The South African group hopes to get between 600 and 700 million euros back from Conforama. A price that’s hard to come by given the performance of the group, which “recorded a zero margin at the end of 2018” according to a competitor who secured the company’s accounts. Especially now that the French activities, which make up 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 by the value of the walls of the 337 Conforama stores, which are mainly located in France, Spain and Switzerland.

Steinhoff is under pressure from its creditors, as accounting irregularities worth several billion euros have been identified over several years. The South African group is backing $10 billion in debt that hedge funds have bought in part to take control and split the group. The US (Mattress) and UK (Poundland) subsidiaries have already undergone a major restructuring, while the Austrian operations 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. Aware of the difficulties, the Ministry of Economic Affairs is closely following the file through the Inter-ministerial Committee for Industrial Restructuring (Ciri), proof that the file is heavy. According to our information, representatives of “Ciri” went to London a few weeks ago to meet with Steinhoff’s creditors and negotiate the terms of the restructuring of Conforama. The South African group plans up to 2,500 job losses and about 40 store closures. French unions estimate that “between 1,500 and 2,000 jobs would be threatened, a large proportion of them in France, for some 20 stores sold or closed in France,” said a workers’ representative. Conforama has 14,000 employees in Europe, 9,000 of whom in France.

An essential restructuring, the extent of which will depend on the buyer. According to several sources, several competitors of Conforama were approached last fall. With varying degrees of success. Only his great rival But would be interested and a favorite. Workers fear this option would lead to massive restructuring as the two brands compete directly with each other. The Competition Authority would also impose a lot of resale of shops.

Steinhoff ready to restructure Conforama

Two rivals remain: Fnac Darty and Casino. The two groups have studied the file but appear unconvinced. First Fnac Darty did some serious work on the subject last fall. Initially seduced, he eventually gave up, explains a good friend of the group, for the time being… Strengthening his position in home appliances was the main interest for his brand Darty. But “furniture is too devastated a market and the Conforama brand is down a notch,” explains a good 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 joint purchasing center with Conforama, Mano, in household appliances. A merger would have made it possible to generate more synergies and small “Confo! », the brand’s new concept, in the casino hypermarkets. CDiscount could also have converted certain points of sale into shops to establish itself in physical commerce. But Casino mainly focuses on assets to sell to reduce debt.

Still, Steinhoff has little chance of winning the asking price. According to various sources, “if the price is too low, the South African group can keep Conforama and restructure it itself before reselling it”, assures a good expert on the stock. No information is being communicated internally at this time. Contacted, Steinhoff and Conforama did not want to answer us. Details are expected before the end of March, during the holding of an extraordinary central works council (CCE).

Leave a Comment