Paris’ Galeries Lafayette Reassures Customers Following Franchise Trouble

PARIS — Galeries Lafayette is seeking to reassure its customers in the wake of weeks of turmoil surrounding regional franchises controlled by French businessman Michel Ohayon.

Ohayon said late Friday that he was placing his retail company Hermione People & Brands in “receivership.” The following day, a spokesperson for the group clarified that HPB would be placed under a “safeguard procedure” that would allow the company to restructure its debt under the court’s protection.

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In a letter to customers, Paris’ Galeries Lafayette, which operates the famous flagship on Boulevard Haussmann and the newer Champs-Elysées outpost, set out to “clarify certain destabilizing information” that was in the news over the weekend.

“For several months, Hermione People & Brands, which has owned and operated 25 Galeries Lafayette affiliated stores in the provinces since 2018, has been encountering unprecedented difficulties with some of its assets such as Camaïeu, Go Sport and Gap,” the letter stated.

“In order to protect the 25 provincial [Galeries Lafayette] stores they own, Hermione People & Brands and its owner Michel Ohayon have applied for placement under safeguard procedure for these said stores, which remain operational to date.

“This disturbing and distressing situation has nothing to do with your Galeries Lafayette Paris Haussmann store and We would like to reaffirm our commitment which remains totally and entirely to serve you,” the company concluded.

Ohayon’s embattled retail and real estate holding company Financière Immobilière Bordelaise, or FIB Group, went into receivership earlier in the week after three property subsidiaries defaulted on a 201 million euro loan issued by the Bank of China.

FIB controls around 30 subsidiaries, including Hermione People & Brands, which acquired 22 Galeries Lafayette stores in 2018, and an additional three stores and an outlet in 2021.

HPB also owned French high street retailer Camaïeu, which declared bankruptcy and closed its more than 500 stores last September, while its struggling sporting goods chain Go Sport was placed into receivership in January. The group also oversees the Gap franchise operations in the country, after the U.S.-based retailer offloaded its stores and exited Europe in 2021.

HPB operates Galeries Lafayette stores in small and midsized cities including Cannes, Rouen, Toulon and Tours.

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