Empty shelves and displays, corners abandoned by brands… What is happening at BHV? Walking through the aisles of the famous Parisian department store, you quickly realise that things are not working at full capacity. And the employees are the first to be concerned. In May, the BHV Marais trade union organisation issued a warning about the company’s financial situation, and the CGT even mentioned a “bloodless” cash flow.
The new boss, Frédéric Merlin, who took over the store at the end of 2023 through his real estate company, the Société des Grands Magasins (SGM), tried to reassure on Friday 13 September on the set of BFM Business, evoking a period of “transformation that is tough”, but the negative signals are piling up. A social and economic committee (CSE) is to be held on Friday, during which the inter-union hopes that management will respond to its concerns.
«The BHV is beautiful, the BHV is well stocked»
For several weeks now, the union has been saying that several suppliers have stopped making deliveries due to non-payment. To give an example, the Madura stand, which was completely full, is a must. A former protester from a textile brand confirmed that her company was not paid for three months, that it stopped restocking and that the BHV asked her if she would accept a payment schedule. “When you don’t have money concerns,” she says, “you don’t offer to pay in instalments.”
On BFM Business, Frédéric Merlin denounces a “media frenzy” and assures that “the BHV is beautiful, the BHV is well stocked”. “In 2024, we are opening 34 new stores and closing 28. That’s the life of a department store,” says the new boss of the iconic Parisian store.
On the issue of late payments, Frédéric Merlin analyses a transition in the way BHV’s accounting works. “We still depend on Galeries Lafayette for accounting. They paid within 10 to 15 days. We are responsible for seeing, over 18 months, whether we can pay within 45 days.”
“We are investing 12 million euros to change the entire BHV collection and accounting system so that it is autonomous. At first we wanted to manage this situation from the SGM headquarters in Lyon, but we were inundated with requests. We created a Mea culpa. BHV team and since then I think everything is going much better,” explains the head of the department store.
This is not enough to reassure the unions, who fear the beginning of a defeat. “Without suppliers, we risk getting very bad figures,” they worry. The former protester from a textile company claims that “there are many more suppliers than management says” who have payment problems. “For underwear alone,” she said, “half of the companies have not been paid for six months and the bookstore has not been paid for a long time either.”
Management supported by Anne Hidalgo
But Frédéric Merlin is not hiding behind the strategy he implemented last year to turn around a BHV that is experiencing serious financial difficulties. “The company has been losing 15 million euros a year for decades. Our challenge is to make BHV profitable from the first year,” he says.
To achieve this, it has implemented “a reduction in overheads, a reduction in the number of references and no replacement of retired employees”. The unions claim that 200 employees have left since the end of December. Questioned by BFM Business at the end of August, they feared a kind of hidden job protection scheme (PES).
But Frédéric Merlin welcomes this profitable strategy: “On 30 July 2023, BHV lost €11 million. This year, on 30 July, it made a profit of €400,000.”
While he reiterates that the goal is to be balanced by the end of the year, he also assures that “there is no financial emergency at BHV: the company has been recapitalized for an amount of 38 million euros, so we have enough to assume two and a half years of losses.” A strategy that seems to be validated by the Paris city council.
The unions now hope to see more clearly the company’s situation during the CSE meeting scheduled for this Friday. They are demanding better communication from management and do not rule out going on strike this summer if they do not receive a satisfactory response.
Source: BFM TV
