Judicial reorganization announced

On Monday, November 2, the Economic Activities Court in Paris announced a judicial reorganization for the company that operates the historic BHV department store in Paris, according to AFP. This legal process also applies to BHV Parly 2, a store located in the Yvelines region. The reorganization opens a six-month observation period, which can be extended once, during which the company may attempt to improve its financial situation.

Financial situation revealed

According to information from the newspaper Liberation, based on an audit by the EY firm, the company had more than 120 million euros in debt as of August 31, with cash reserves below 1.5 million euros. A significant portion of this debt—over 100 million euros—was owed to suppliers, including more than 40 million euros to Galeries Lafayette, the former owners and managers of the department store.

Management acknowledges difficulties

After initially contesting the company’s financial troubles, the management finally admitted to the difficulties and requested judicial reorganization to "preserve the business and employment" and "secure its recovery plan." The company SEGM BHV, which manages the historic Parisian department store known as the "Bazar de l'hôtel de ville" (BHV), had previously admitted to being in bankruptcy.

Lyon connection in the case

Although BHV Marais is a 170-year-old Parisian institution, this case also involves a significant Lyon connection. The company’s headquarters was moved to Lyon in February, which raised questions about the appropriate legal jurisdiction for the case. Lyon entrepreneur Frédéric Merlin, a former executive of the Society of Department Stores (SGM), remains connected to the situation.

Dispute with Canadian fund

The company’s management had cited a financial dispute with the Canadian fund Brookfield, which owns the building where the store is located, as a major cause of the difficulties. However, Brookfield strongly disputes this explanation and has not acknowledged any such conflict.