The family-owned group said in a statement that on July 6 it had requested to enter administration in Paris’ commercial court, which three days later gave the green light. Alès Groupe’s operational subsidiaries are not involved.
The company is facing severe liquidity issues. On June 30, while publishing its 2019 results, Alès Groupe said that at the end of May it had a cash balance of around 14.8 million euros and financial debt of approximately 96.8 million euros.
“In this context, the group is facing a significant need for liquidity and is continuing in this framework the sale and leaseback process of some of its real-estate assets and the strategic review of its assets,” Alès Groupe said in a statement at the time.
The group’s sales last year gained 2.7 percent on a like-for-like basis to 208.6 million euros. Meanwhile, Alès’ profits were down 39.1 million euros in 2019, versus a decline of 15.4 million euros in 2018.
Alès said that its activity has been seriously impacted by the COVID-19 crisis that resulted in a distribution freeze in almost all European countries, followed by the U.S.
The group is now in a six-month observation period, which began on July 9.
“Alès Groupe management will seek all solutions allowing, under the best conditions, to continue the business, maintain employment and settle liabilities,” the company said in a statement, adding it would be open to finding new investors selling outright.
Alès Groupe’s stock will not resume trading on the Euronext Growth market, where it was suspending on June 29, until further notice.
The group has been in flux for a number of years. In mid-December 2019, it announced a new chairman of the board, Patrick Puy, following the resignation of Frédéric Poux.
Puy was charged with accelerating the group’s transformation based on three axes: improving its profitability, optimizing operations and production processes, and a strategic review of Alès Groupe’s activities.
Since 2016, Puy has been chairman and chief executive officer of Vivarte, a fashion and shoe concern. The turnaround expert was brought into that beleaguered company as it attempted to restructure its debt.
Also in mid-December 2019, Alès Groupe said the capital increase it had announced on April 29, 2019, and approved on June 20, 2019, had been postponed indefinitely.
Poux had been appointed chairman of Alès Groupe’s board in April 2019, the same month the company got a new minority shareholder, Co-Capital.
The prior year, in October, Alès Groupe sold the storied French fragrance house Parfums Caron to Cattleya Finance for 29.9 million euros.
Alès Groupe was founded by Patrick Alès, who passed away last year at 88.
In 1969, Alès established the Phytosolba laboratory, which specializes in hair-care products known under the brand name Phyto. He grew the business with the addition of dermocosmetics through the acquisition of Laboratoires Lierac a decade later.
Alès Groupe’s other brands include Jowaé, Kydra, Secret Professionnel and Subtil.