Dec 3, 2013
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Kering board to pick La Redoute bidder

Dec 3, 2013

Retailer Kering has received four offers for its loss-making La Redoute mail order unit and plans to hold a board meeting to choose a bidder on Wednesday, sources said. La Redoute is part of Kering's mail order business Redcats, the bulk of which Kering has already sold off as it seeks to transform itself from a retail group to a company focused on luxury and sports brands.

The heads of La Redoute and Redcats, Nathalie Balla and Eric Courteille, jointly submitted a bid at the end of last week, a source close to Balla said, without giving financial details.

Another source familiar with the matter said Kering had received a second "offer of an entrepreneurial nature", without giving further information.

The two latest bids follow interest from an industry group and an Anglo-Saxon investment fund, other sources said. Media reports have cited real estate group Altarea Cogedim, as well as The Gores Group.

"The (Kering) board has been summoned on Wednesday morning concerning La Redoute," a source familiar with the matter said. "This will be followed in the afternoon by an extraordinary works council meeting to inform staff."

Kering declined to comment. The company has said it was aiming to announce a deal by Christmas.

Altarea Cogedim and The Gores Group declined to comment.

Kering has injected more than 400 million euros ($542 million) into La Redoute since 2008 and would be ready to inject at least another 300 million in order to cover its losses for a few years more and finance its restructuring, sources close to the matter have said.

Kering has said significant job cuts would be needed as part of a restructuring of La Redoute, sparking protests from staff and local politicians in northern France, as well as demands from Lille's Socialist mayor, Martine Aubry, for guarantees over its future.

Unions fear around 700 jobs are at risk. La Redoute has around 2,500 staff in France, where the government is battling unemployment at a near record 10.9 percent. It employed around 5,000 people in 2008, and has been hurt by ageing logistical and IT tools, as well as the growth of online shopping.

Kering Chief Executive Francois-Henri Pinault told Aubry he was ready to give investment support to any buyer and that he would guarantee operations during La Redoute's modernisation, the politician said last month.

She had criticised Kering for not doing enough to bring La Redoute's logistics and IT systems, and staff training, up to date sooner.

Kering began its transformation in 2006 with the sale of retail chain Printemps when the group was still called PPR, an abbreviation of Piinault Printemps La Redoute. Kering is controlled by the Pinault family.

Kering issued a profit warning last month, blaming one-off charges related to sports brand Puma's restructuring and the disposal of La Redoute. ($1 = 0.7377 euros)

By Pascale Denis

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