Royer Group Seeks Court Protection Amidst Financial Woes

The Royer Group, a prominent Brittany-based footwear distributor headquartered in Fougères, has sought the protection of the Rennes Commercial Court, following its unsuccessful efforts in 2024 to refocus on profitable activities. This move signals significant challenges for the company, which has been grappling with a complex market environment.

Since 2022, the group has faced a series of successive crises coupled with an intensification of international competition within its market. These external pressures have severely weakened its operations, leading to an accumulation of debt. The court-supervised reorganisation proceedings, supported by the commercial court, its advisors, and a court-appointed administrator, are now critical for the business, which currently employs 260 people across approximately twenty companies worldwide, including seven in France.

The current situation contrasts sharply with the group's performance in 2019. Founded in 1945 as a family-owned enterprise, the Royer Group reported 500 employees in France, a robust turnover of €300 million—with 45% derived from exports—and the sale of over 20 million pairs of footwear. The group, known for owning the iconic Kickers brand, was a significant player in the European footwear market.

However, the group was compelled to implement major adjustments to its business model beginning in 2020. This included a plan to cut approximately 150 jobs in France from its then total of 500 employees. Key challenges arose from the loss of its distribution licence for the US brand New Balance, a significant revenue stream, and the strategic decision to close its Maleville site in Aveyron.

Further restructuring efforts followed, including an initial debt restructuring in 2022. The group also disposed of a portion of its Cholet premises, divested the Von Dutch brand, mothballed several high-end labels, and halted its private-label activity in Germany. These actions were intended to streamline operations and refocus the business primarily on its core brand, Kickers, with a strategic aim, as envisioned by Jacques Royer, to expand its international presence.

Despite these extensive measures, the group's ambition to develop Kickers internationally was ultimately impeded. According to the Royer Group, an "excessively high level of indebtedness" in the face of a persistently unfavourable market context proved insurmountable. The financial performance has seen a significant decline, with the group's turnover for 2023 recorded at €132 million, half of which came from exports. Projections for 2024 anticipated turnover to be well below this figure, with the trend showing no signs of improvement even into 2025.

Under court protection, the Royer Group aims to restructure its debt and find new momentum. It seeks to ease its cash position while developing a new strategic plan specifically for four of its French companies. The group continues to hold valuable licences for well-known brands such as Umbro, Freegun, and Dim, in addition to children's brands Aster and Mod8.

Looking ahead, a reshaping of the group's operational scope appears to be under consideration. The Royer Group is exploring various options, including validating a new strategic plan, pursuing further asset disposals, or seeking financial backing from new investors or strategic partners to ensure its long-term viability. These pivotal projects, however, will proceed without Marc Le Roux, who was recruited last year as managing director with the specific mandate to revitalise the group, but has since moved on to become Reebok's managing director for Europe.