Relevant Document (in French):
FY’20 Report
French shoemaker Groupe Royer is looking to raise new debt as part of its ongoing turnaround effort, sources told Reorg. The company is in talks with banks and alternative lenders to secure new funding.
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The family-owned company has been working with debt advisors from Kepler Cheuvreux for around 18 months to address liquidity issues and to transform its capital structure.
According to Groupe Royer’s latest report for 2020, the company has bank debt of around €37.7 million and owes a further €60.2 million to suppliers. The group’s lenders are a pool of French banks with Societe General leading the consortium.
Groupe Royer owns several shoe brands such as Kickers and also has licenses with international brands like Umbro and Everlast to manufacture and distribute shoes on their behalf. The business was heavily impacted by the Covid-19 crisis which triggered a significant drop in revenue due to a reduction in orders and the loss of a major licensing contract with New Balance.
Prior to the Covid-19 outbreak, Groupe Royer generated annual revenue of around €300 million. The company is currently not generating positive EBITDA due to Covid-19 related issues, and while it has some loans from French banks, it is seeking new funding to support growth and recovery, sources said.
Groupe Royer undertook an internal restructuring in September 2020 due to a steep drop in orders. As part of the restructuring, Groupe Royer cut 150 of its 500 France-based jobs and reduced operations at some of its manufacturing sites in an effort to cut costs, according to French
press reports at the time.
CEO Jacques Royer said in an
interview earlier this year that general retail sales were down around 20% year over year due to the Covid-19 crisis. He added that Groupe Royer’s e-commerce operations had risen and represented around 25% of the company’s revenue.
Created in 1945, the family-owned group is based in Brittany, northwest France, and specializes in the footwear trade, from design to distribution. Since its inception, the company has been continually controlled by the Royer family and Jacques Royer, son of founder Louis Royer, has been CEO for around 30 years.
--Lara Gibson