MS Mode France and its 134 stores have stopped payments
MS Mode is going through a reorganisation, and the steps to be taken appear to be drastic. The Dutch plus-size fashion retailer is facing a slump in sales in its two main markets, the Netherlands and France, and an excessive level of indebtedness. As a result, in September it embarked on a large-scale reorganisation, which began in Belgium and is also going to affect France. French subsidiary MS Mode France has in fact recently declared it is suspending all payments.
The Dutch retailer operates 134 stores in France, with over 600 employees between store personnel and administrative and logistics staff. Their fate is currently in the hands of the Tourcoing court in France, which will rule on the suspension of payments proceedings filed for by the retailer on 30th September.
The employees fear a scenario similar to that of Belgium's. MS Mode's owner, Coolinvestments, is working in partnership with GA Europe, a restructuring specialist, and Rabobank "to clean up the retailer's operational and financial situation," and as a result has filed for bankruptcy for the forty or so Belgian stores. It is Coolinvestments itself, through an arrangement with a long-standing employee, which reacquired only half of the stores before the court, thus circumventing Belgian social security law.
The situation for MS Mode's French subsidiary is still very hazy. Even before any court decision, Coolinvestments has stated that "it is not to be ruled out for the retailer to resume operations in France under a different format." A streamlined format perhaps? This is what the owner wants, putting itself forward to acquire only part of the French business for which Coolinvestments itself would file for bankruptcy.
France generates a revenue of approximately €80 million for the Dutch retailer, which is operating over 600 stores in Europe before the reorganisation.
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