France's BrandAlley goes into receivership, looks for investors
today Sep 10, 2019
It is going to be a complex autumn for France's BrandAlley. The multibrand flash sales website specialised in fashion entered into receivership on September 4, following a ruling by the trade court in Bobigny, France.
The separately owned UK business, BrandAlley UK, which has been independent from its former French parent company since undergoing a management buyout in 2013, is unaffected by the ruling.
The ruling, reported by the LSA agency, came in the wake of the appointment of a team from French corporate turnaround specialist Phinancia, which was called upon in summer to solve BrandAlley’s crisis.
BrandAlley issued a statement indicating that it is open to selling a full or partial stake in the company, and that “it has received several expressions of interest and is holding talks with an industry player.” According to the statement, going into receivership will enable “a framework for the selling process to be established.” Should a new investor enter the frame, BrandAlley would have the opportunity to “evolve its business model, making it more consistent with the reality of a deteriorating apparel market.”
BrandAlley was founded in France in 2005 by Sven Lung, launching British subsidiary BrandAlley UK as a joint venture with News International in 2009. The UK subsidiary underwent the MBO by Bruce MacInnes and Rob Feldmann in 2013 and continues to thrive, having since acquired luxury shopping site Cocosa, and reporting a 122% increase in revenue to £46 million in the year to December 2018.
On the other side of the channel, however, the French company, taken over in 2014 by the Andrino group, has so far had a troubled 2019. Its former CEO, Cyril Andrino, sold his stake in the company in the first half of the year. Since then, a new pool of investors from the IT and digital technology sectors, among them Model Conseil, Sparta and Retail fast forward, has been BrandAlley’s majority shareholder.
In mid-July, the investors decided to place the running of the company in the hands of Paul-Henri Cécillon and Jean-Jacques Raillard, trying to engineer a recovery.
BrandAlley ranks third among French flash sales sites, with a revenue of €70 million in 2018, 16 million members and 7.4 million monthly visitors, and it features 2,500 brands. One of BrandAlley’s characteristics is to stock both current collections and inventory clearance products, selling them on a regular basis as well as through flash sales.
The company stated that it is keen to “grow its marketplace, increase the number of flash sales and reduce stock, while still offering an extensive product range. In parallel, BrandAlley wants to refocus on the casual, relaxed style that made it successful initially, introducing also home decoration and lifestyle products.”
The court has appointed a team of receivers, and the receivership period will extend until March 4 2020.