Naf Naf Faces Judicial Recovery Amid Financial Struggles
The women's fashion brand enters judicial recovery, threatening 600 jobs in France.
Naf Naf, a women's ready-to-wear fashion label, has been placed under judicial recovery for the third time in its history, raising concerns for approximately 600 employees in France.
The decision by the commercial court of Bobigny in Seine-Saint-Denis, which occurred on Friday, stems from the company's ongoing cash flow difficulties.
The CFDT union expressed its apprehension over the ruling, stating that while it postpones immediate liquidation, it marks the beginning of a significant period of uncertainty for employees.
Recently acquired in June, Naf Naf is currently facing cessation of payments, illustrating the financial strain it is under.
According to court documents, the company reported liabilities amounting to €44 million while generating revenues of only €47 million in 2024. The court acknowledged the potential for recovery based on the debtor's statements and projected activity plans alongside the available cash resources, granting the company a six-month observation period to address its financial challenges.
A follow-up hearing is scheduled for July 23.
In June 2024, Turkish firm Migiboy Tekstil had committed to preserving 90% of Naf Naf's jobs and retaining around 100 company-owned stores.
The acquisition was valued at more than €1.5 million and resulted in the preservation of 521 jobs out of 586, as well as the retention of subsidiaries in Spain, Italy, and Belgium.
However, the CFDT has indicated that even if the restructuring plan is successful, drastic reorganization—including store closures and further reductions at headquarters—is likely.
In a worst-case scenario, there looms the possibility of judicial liquidation, which would involve the sale of stores, inventory, and the brand itself, leading to severe social repercussions.
The decision by the commercial court of Bobigny in Seine-Saint-Denis, which occurred on Friday, stems from the company's ongoing cash flow difficulties.
The CFDT union expressed its apprehension over the ruling, stating that while it postpones immediate liquidation, it marks the beginning of a significant period of uncertainty for employees.
Recently acquired in June, Naf Naf is currently facing cessation of payments, illustrating the financial strain it is under.
According to court documents, the company reported liabilities amounting to €44 million while generating revenues of only €47 million in 2024. The court acknowledged the potential for recovery based on the debtor's statements and projected activity plans alongside the available cash resources, granting the company a six-month observation period to address its financial challenges.
A follow-up hearing is scheduled for July 23.
In June 2024, Turkish firm Migiboy Tekstil had committed to preserving 90% of Naf Naf's jobs and retaining around 100 company-owned stores.
The acquisition was valued at more than €1.5 million and resulted in the preservation of 521 jobs out of 586, as well as the retention of subsidiaries in Spain, Italy, and Belgium.
However, the CFDT has indicated that even if the restructuring plan is successful, drastic reorganization—including store closures and further reductions at headquarters—is likely.
In a worst-case scenario, there looms the possibility of judicial liquidation, which would involve the sale of stores, inventory, and the brand itself, leading to severe social repercussions.
