Orchestra-Prémaman to slash nearly 600 jobs
Feb 18, 2020
Children and maternity wear specialist Orchestra-Prémaman, currently employing 2,920 people, is about to slash nearly 600 jobs in France and abroad, following a “reorganisation plan” presented on Monday February 17 to its employee representatives and staff.
“The reorganisation means the group is refocusing on its five main markets, France, Belgium, Switzerland, Morocco and Greece, leading to the liquidation and closure of 81 stores outside France, and also to the transfer of warehousing operations from the Saint-Aunès and Saint Jean de Vedas hubs to Arras [in France],” said Orchestra-Prémaman. The group had entered a protection procedure on September 24 2019 and, on the morning of Monday February 17, trading of its shares on Paris’s Euronext index was suspended to allow for this announcement.
In France, where the group generates 62% of its revenue, 149 retail jobs will be cut, as well as 115 in logistics and 38 at the head office, while approximately 300 jobs will be suppressed outside France. However, Orchestra-Prémaman indicated that 13 new jobs will be created at the head office, and that 130 jobs at the Arras warehouse, with joint-venture company Orlog, will be offered as a job reclassification opportunity.
Refocusing on the group's so-called strategic markets means the closing down of 81 stores outside France, of which 73 between Germany, Spain, Luxembourg and also Belgium, which accounts for 66% of the stores outside France and where the group had, earlier in the year, announced the closure of 34 shops. This will lead to the slashing of 300 jobs in total.
As for the Orchestra-Prémaman stores in France, where the group intends to focus on the larger shops, 44 will close down, of which 36 are subsidiaries, accounting for 149 employees out of the current total of 304.
Increased focus on childcare products rather than on less profitable apparel
Product-wise, the group stated it is going to streamline the apparel range. Orchestra-Prémaman wants to put a greater focus on childcare products which, in Q3 of the non-standard 2019-20 financial year, recorded the most dynamic performance within the group, growing by 4.4%. E-tail, which in the same period posted an 18.3% growth, is also at the heart of the new strategy, as are omni-channel services.
Finally, the group is going to concentrate all its logistics operations in the Arras warehouse, which will take over the activity of the Saint-Aunès and Saint Jean de Vedas hubs (with 115 employees), “with the creation of 130 new jobs at joint-venture company Orlog, which will be offered as a job reclassification opportunity to Orchestra-Prémaman employees,” said the group. Orchestra-Prémaman also indicated it is revising its purchasing strategy, halving the number of suppliers and closing down its Shanghai sourcing office, relocated to Hong Kong.
The reorganisation will be part of the new protection plan which will be filed with the specialist trade court in Montpellier, on a date yet to be defined. On March 17, a new hearing has also been scheduled for the court to rule on the request of a new six-month monitoring period.
Orchestra was founded in France by Chantal and Pierre Mestre in 1995, and in 2012 it bought Belgian company Prémaman, a childcare product specialist. In the years that followed, the group opened a spate of Orchestra stores, and grew with renewed impetus, recording for example a 17% revenue increase in the 2015-16 financial year, when it reached €559.6 million. At the time, the group envisaged generating a revenue of €1 billion in 2019. Instead, the 2018-19 financial year closed with a 6.8% revenue slump, down to €570 million.
According to Orchestra-Prémaman, the group’s growth has been hampered by changes in market conditions: declining birth rates, changes in consumption behaviour with the emergence of bargain-basement and second-hand marketplaces, and stiffer competition with the arrival of pure players and e-tailers. In 2015, the group manifested the intention of merging with US maternity wear giant Destination Maternity, but negotiations dragged on and were eventually abandoned in 2017.
After pausing due to the reorganisation announcement, trading of Orchestra-Prémaman shares resumed on February 18.
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