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Alinéa, Naf-Naf, André… The first brands weakened by the coronavirus

The government is starting to admit it in a word: despite all the aid deployed, partial unemployment and guaranteed loan in mind, the crisis will take its toll on French companies. The Ministry of Labor has already identified nearly 2,500 job cuts planned as part of job protection plans between March 1 and May 10.

Yellow vests, pensions and coronavirus

In trade, the situation of certain brands remains very fragile despite the end of confinement. This weekend, the furniture chain Alinéa declared a cessation of payment with the commercial court of Marseille, according to the newspaper Provence.

→ INTERVIEW: Coronavirus, “not all companies will recover”

The brand has around thirty stores and nearly 2,000 employees. According to Alexis Mulliez, the managing director, “ Alinéa was engaged in a transformation that required efforts and investments One after another suffered the yellow vests crisis, demonstrations against pension reform and now the coronavirus epidemic.

In clothing, serial procedures

In fashion and ready-to-wear, bankruptcy procedures are also increasing. At the end of March, there was first the shoe maker André and his 500 employees, with more than 4 million euros in losses in the first fortnight of confinement alone. Then the fashion accessory chain Tie Rack, which has a hundred employees. The brand of clothing for babies and children Orchestra-Prémaman, which was already in the safeguard procedure (see below), has also gone into receivership.

Finally, the Naf-Naf stores were placed under this regime on Friday May 15 by the Bobigny Commercial Court. The apparel group employs 1,170 people, and two takeover bids are on the table. Less serious, La Halle, which employs 6,000 people in France, is the subject of a safeguard procedure. All these brands have already been experiencing financial difficulties for several months, which the closure of stores, during confinement, has worsened.

Fear for the future

Excluding clothing, bankruptcy proceedings have been opened for companies in sectors as varied as laundry, with the company 5àSec, the wholesale food trade, with the Canavese group, or the sale of fishing equipment, with the Pacific Pêche brands. All of these companies have been severely affected by the coronavirus epidemic, which has resulted in either a closure of their operations or a slowdown in production.

In its last bulletin, the wage guarantee scheme (1) recognizes that ” the collective procedures newly opened during the state of health emergency mainly concern companies already in serious difficulty ” But fears for the rest: ” the measures taken by the state to deal with this crisis only have the effect of absorbing and passing on the effects on the French economy.

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► From backup to liquidation, different measures for companies in difficulty

The judicial safeguard procedure is requested if the business is not yet in default but is experiencing significant financial difficulties. It concerns companies which technically could still pay their creditors, but must restructure their activity to avoid bankruptcy.

Judicial reorganization intervenes if the company is in default, that it can no longer repay its debts. The company must then file for bankruptcy and a balance sheet of the activity is established with the court. After several months of recovery proceedings, the company can either continue its activity if it is better, or be sold, or be placed in compulsory liquidation.

Judicial liquidation corresponds to the bankruptcy of the company. The goods are sold to potential buyers and debts are paid to creditors when the recovered funds allow. The company closes permanently.

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