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Auchan and Leroy Merlin Owners Lost on Three-Piece Suits

Photo: getyoursale.ru

“The Mühlier family, a French retailer that owns Auchan Group, Leroy Merlin, Decathlon, etc., will reduce the number of its stores in France,” wrote Le Monde.

Jules, Brice, and Bizzbee are men's clothing brands and members of the Happychic Group of companies, with the annual revenue of approximately 740 million euros. Müller Family Association (AFM) - the owner of the company - announced a “transformation plan” that would ultimately lead to the closure of 88 of the 543 stores that belong to these chains in France, and termination of 466 employees.

                According to Jean-Christophe Garbino, the CEO of Happychic, sales at these chains have been falling for seven years in a row, and 2018 had a rough start. “The demand has dropped by nearly 10%,” he said. “Our profit must cover our costs, including the cost of rent. Otherwise, the company will end this year in the “red” zone.”

In an attempt to reduce operating costs, Happychic will close its warehouse in Le Mans, which employs 48 people.

A Valuable Asset

                At the same time, Jules, Brice and Bizzbee are three famous brands of men's clothing. In total, these companies have 720 stores, most of which are located in France. Jules originates from the Camay Hommes chain, based in Roubaix in the North of France, acquired in 1999 and renamed AFM. Brice - a network of inexpensive men's suits, is based in Le Mans. It was acquired by Müller in 2003 from its founder Dominique Marcade.

                Since then, Happychic has never tried to combine Jules and Brice. It preferred the two companies to complement each other instead. “Being always number two in the market after its leading chain, Celio, Jules has always been a star of the shopping centers,” said Le Monde

In the 2000s, the brand had revenue of 10,000 euros per square meter," said Garbino.

                However, Brice never "made money". Founded in 1985, in the time of stockbrokers, when  men's suits were in fashion and sales grew, the company suffered from a complete reversal of the men's clothing market. Today, men rarely wear a suit, even if it is sewn from thin fabric, preferring jeans. “Promotional discounts that companies today are forced to offer in order to attract customers reach 25%, against 17% five years ago,” says Laurent Tumin, director of distribution, fashion, and luxury goods division at Accenture, a consulting company. “Since that time, experts in three piece suits lost hope for a good result. “

Now, AFM has announced about the Fashion3 “mission”, which will be involved in the reformation of the clothing business, and Brice and Jules will merge. The combined chain may get a new name.

Margarita Aranovskaya

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