Alain Broekaert’s Belgian group, GAB, is currently in the process of initiating receivership proceedings for the French subsidiary of Scotch & Soda, a Dutch fashion brand. This move comes less than half a year after GAB’s acquisition of the subsidiary, which oversees an extensive network of 24 stores in France. Scotch & Soda itself has a storied history, having faced bankruptcy in its native Netherlands as far back as 1985. In March 2023, the brand found itself under new ownership, having been purchased by the US group Bluestar Alliance. Following the acquisition, Scotch & Soda’s French operations came under the stewardship of GAB in May. Despite GAB’s efforts to revitalize the subsidiary, it has encountered significant hurdles, including substantial rent arrears and ongoing financial losses, which have led to the cessation of payments to creditors. As a result, GAB has decided to pursue receivership by applying to the Paris Trade Court, with the court expected to issue its decision on this matter on November 2nd.
One consequence of these proceedings is that the 117 French employees of the company have not received their October wages, as confirmed by GAB, substantiating a report from an undisclosed source. GAB’s strategy does not involve a hasty sale of the subsidiary but rather the formulation of a comprehensive recovery plan. This plan may entail the closure of underperforming stores in a bid to optimize the overall business’s sustainability.
Since its establishment in 2009, Scotch & Soda has managed a network of 24 mono-brand stores throughout France, which also includes three outlet locations. In the past, the brand had operated concessions within the French branches of Galeries Lafayette, but these were discontinued during the summer of 2023, reflecting the broader challenges faced by the company. The situation underscores the complexities and risks associated with managing and reviving businesses in the highly competitive and ever-evolving fashion industry.
