To convince the banks to put money back into the pot in this new procedure, the founder, Philippe Ginestet, had to step back and leave the operational management of the company.
The Gifi bazaar brand, which has 700 points of sale, will neither be sold in one piece, nor sold piecemeal, nor liquidated. Its founder, Philippe Ginestet, ultimately remains the owner of the family business he created in 1981, which is now in great difficulty. After looking for a buyer, its creditors decided to grant it a final reprieve in exchange for guarantees, as part of a conciliation procedure launched at the end of August.
Negotiations were intense between the dozen banks involved, members of Bercy (Ciri) and Philippe Ginestet, to reach this agreement signed at the last minute, during the night from Thursday to Friday. Financial institutions have agreed to cancel 470 million euros of debt, according to information from The Letter confirmed at Figaro. With this operation, the banks enter the capital of the company but Philippe Ginestet remains “main shareholder” of GIFI, indicates the brand which “save his independence”. The company will also receive a new financial contribution estimated at 150 million euros, specifies a source.
In return, the founder would provide 270 million euros in guarantees via his holding company GPG (Philippe Ginestet Group), whose real estate assets are estimated at some 600 million euros (it includes other stores than those of Gifi).
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The founder leaves the operational management of the company
This is not the first time that the businessman has given pledges. At the beginning of 2024, the financial institutions had reached an agreement with him to reschedule Gifi's debt as part of a first conciliation. Philippe Ginestet had obtained an additional 100 million euros in new money in exchange for guarantees on real estate held by GPG. In vain, the company failed to recover.
-Also, to convince the banks to put money back into the pot in this new procedure, the manager also had to step back and leave the operational management of the company. A decision probably difficult to make for this septuagenarian who finds it very difficult to let go of the bar. However, he was appointed chairman of the new supervisory board. A board of directors is set up to ensure operational orders.
Just a month ago, this scenario was difficult to imagine. A sale of Gifi, whose turnover amounted to 1.2 billion euros in 2024, was a preferred option. At the end of September, the Lazard bank was mandated to find a buyer and several expressions of interest had been sent, including that of Moez-Alexandre Zouari, who already owns the discount brands Maxi Bazar and Stokomani. However, this transfer only concerned operations and did not include the sale of store premises in strategic locations. Some observers also feared that the case would end in safeguard proceedings, or even in judicial recovery.
With losses estimated at around 40 million euros according to an informed observer, the company is in bad shape. Certainly, its situation deteriorated from spring 2023, shaken by a major IT failure. “For several months, we no longer had any insight into sales and stocks. We had resupply problems”explained an employee recently.
Very high stocks
But this breakdown does not in itself explain the difficulties into which the bazaar specialist is plunged, after having known years of glory. In reality, Gifi is struggling to resist fierce competition from new hard discount players. Such as the sign of «hard discount» Dutch company Action, which has continued to open stores in recent years. Or the Chinese online site Temu, which is attracting more and more consumers with its items sold at knockdown prices.
To redress the situation, a three-year recovery plan will be put in place. Gifi will have to quickly find a solution to sell off stocks which remain very high in stores and warehouses since the computer outage. Much more delicate: reducing costs via a savings plan. In addition to tackling the logistics system and significant communications expenses, management will find it difficult to avoid the thorny subject of staff numbers deemed too numerous, explains an informed observer.
