Kering stands to sell La Redoute and Relais Colis in MBO

Kering's board members met on Wednesday to discuss the

four offers the group has received for the purchase of mail order catalog Le Redoute and delivery network Realais Colis. They decided to go ahead and enter exclusive negotiations for a management buy out with Nathalie Balla, who is the current chairman and CEO of Le Redoute, and Eric Courteille, who is the chief administrative officer of Redcats.

The acquisition offer from Balla and Courteille for La Redoute and Relais Colis may have been an unexpected move, but was backed by a team of managers from both companies. The takeover offer satisfies all conditions that Kering required, including a long-term plan to implement needed changes to the businesses for its future, a solid plan for jog management and the support from experienced buyers who are commitment to the companies.

Balla and Courteille are the "best people" to reform La Redoute

François-Henri Pinault, Chairman and CEO at Kering, commented: “I am absolutely sure that, with the support of the managers, Nathalie Balla and Eric Courteille are the best people to successfully make the changes necessary to enable La Redoute to keep its place as the Internet leader for clothing and home ware in France.”

Together Balla and Courteille will reform the company and create a “new entity” in which they would invest “personal capacity” and acquire all the shares of La Redoute, Relais Colis and Redoute International. The new company will be chaired by Balla and Courteille, who will hold the majority shareholding, and the remainder of the capacity will be held by a team of managers, according to a press release sent out by Kering.

Kering will take on corporate social responsibility for the company and will re-capitalize La Redoute and Relais Colis to ensure that the companies have a “healthy financial position backed by a significant cash surplus” before transferring control to the buyers. Kering also plans to ensure that there is enough money to fund the companies future transformation and cover any interim losses.

Balla and Courteille said the following about the management buy out: “Because we know it well, we have a very precise vision of the future of La Redoute and what is needed to turn it around. Following its sales and marketing move to digital, we want to continue and accelerate the transformation of the company within the framework of a long-term industrial plan, capable of ensuring a return to growth. We intend to enable Relais Colis to accelerate its development. This plan will get all La Redoute and Relais Colis staff working together for the success of the business. It intends to keep La Redoute’s business in its historic employment area and minimize as much as possible its impact on jobs.”

Kering has injected more than 400 million euros into La Redoute since 2008 and previously mentioned that they would be willing to inject another 300 million in to cover losses and help finance its restructuring, sources close to Group told Reuters. La Redoute is the last retail business that Kering planned to sell in order to turn its full attention to building up its luxury and sports wear brands.