BHV placed in receivership: 700 jobs hang on a six-month reprieve
The Paris commercial court on Monday opened receivership proceedings against the company that runs BHV Marais and BHV Parly 2. The department store remains open, but its future will be decided over the coming months.
It is official: the Bazar de l'Hôtel de Ville is now under court protection. On Monday 2 November, the Paris commercial court (tribunal des activités économiques) placed SEGM BHV in receivership (redressement judiciaire). The company runs the famous department store in the Marais, an institution in the heart of the capital for 170 years, as well as BHV Parly 2, in the shopping centre of the same name in the Yvelines.
The retailer employs around 700 people, according to figures from September.
Six months to avoid the worst
The procedure opens a six-month observation period, renewable once. At the end of it, there are three possible outcomes: a recovery plan allowing management to keep the business going, a sale to a buyer, or liquidation.
Both management and staff representatives had called for the move, with the latter demanding that it be made urgently. Only a few days ago, the company was still insisting it was not insolvent, before admitting last week that it was bankrupt and asking the court for protection itself, in order to safeguard the business and jobs.
Management welcomed the decision and says BHV will stay open.
In a statement, BHV chairman Karl-Stéphane Cottendin said the cash-flow problems had undermined the best months of the year, and that a crucial period now lay ahead.
A tug of war with the landlord
BHV's fall comes as no surprise. In June the department store was sold at a loss by businessman Frédéric Merlin's SGM to some of its executives. Over the summer, the new team presented a relaunch plan that was quickly choked by a lack of cash.
Management partly blames these difficulties on a dispute with the Canadian fund Brookfield, which owns the building. Brookfield firmly disputes that account. In its statement, management says it hopes court protection will allow talks with the landlord, which it says it has been waiting on for several months, to be concluded very quickly.
In recent years the retailer has suffered a string of setbacks: accusations of unpaid supplier invoices and a controversy over a heavily criticised partnership with online fashion platform Shein.
Staff wait
Staff representatives said they wanted to inform employees on site first before speaking publicly. For the workforce, the timing is tight: the procedure begins as the end-of-year holidays approach, a key period for department stores.
What next
The court will monitor the business during the observation period. Management will have to show that a continuation plan is viable. Failing that, a takeover by a third party, or even liquidation, could be on the cards for this institution of Parisian retail.
