BrandAlley bought by its former UK subsidiary
today Dec 13, 2019
French multibrand fashion e-tailer BrandAlley, facing severe financial difficulties, will continue to operate under the aegis of its former UK subsidiary, BrandAlley UK, which split from the French parent company in 2013. On December 10, the trade court in Bobigny, France, which placed BrandAlley into receivership on September 4, approved the acquisition bid put forward by BrandAlley UK.
The bid comprises all of BrandAlley’s French assets, although only 50% of its employees, in other words 40 out of 80, will retain their jobs. A new legal entity called BrandAlley France has been set up to carry on with the business.
“BrandAlley UK, since the split that took place in January 2013, has engineered a remarkable recovery, adopting a more upmarket positioning and becoming very successful at flash sales,” said interim director Paul-Henri Cécillon, who took charge of struggling BrandAlley in the summer, via his consulting firm and corporate turnaround specialist Phinancia. “This exit solution maintains intact [BrandAlley's] DNA and strengthens its European dimension,” he added. The value of the investment was not disclosed.
BrandAlley was founded in France in 2005 by Sven Lung and then bought by the Andrino group in 2014. The company has already changed hands once in 2019. In the first half of the year, Cyril Andrino sold his stake, and this led to the creation of a new pool of investors from the IT and digital technology sectors, among them Model Conseil, Sparta and Retail fast forward, which acquired a majority stake in BrandAlley.
“When I arrived in June, the situation was complex. The company was holding on well, but the shareholders had stopped investing,” said Cécillon. “We decided to ask for the court's protection in order to organise the company’s sale. To increase [BrandAlley’s] appeal with potential buyers, we worked on its cash flow and revised the logistics side of some of the agreements we had with suppliers, enabling us to generate immediate cost savings,” he added.
BrandAlley has 450,000 active customers and claims an annual revenue of €46 million, which makes it the third-largest event sales operator in the fashion sector in France. It built its business selling a mix of current collection and inventory clearance products from 2,500 brands, some permanently featured on the site and some sold via flash sales.
Since the new owner has a more upmarket positioning, BrandAlley France is likely to expand its fashion range in future, with new labels appearing on the site. Cécillon, on behalf of the new owners, has also promised new investment in marketing and communication initiatives, and that the product range will be broadened to include other categories, like home decoration and lifestyle products, something which has already started in the last few months.
BrandAlley UK is a leader on its market and generated a revenue of €70 million in the last fiscal year. Before buying BrandAlley France, the company led by Rob Feldmann had already been active on the acquisition front. Last spring, it bought British luxury fashion e-tailer Cocosa, for an investment estimated at GBP1.5 million.
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