BSF

"The report first analyzes the internal sales of Christian Lacroix and Céline. Christian Lacroix lost money every year from 1988 to 1998. Initially belonging to Financière Agache and La Belle Jardinière, mostly owned by Bernard Arnault, the company became the property of Louis Vuitton from 1993 onwards, which bought this loss-making machine for 80 million francs. "Subsequently, from 1993 to 1998, Louis Vuitton supported Christian Lacroix's losses for a total amount of 270 million francs," says the report, which continues: "The Christian Lacroix operation results in a profit for BSF, a company owned by Mr. Bernard Arnault, through various holdings, to the detriment of minority shareholders of LVMH, a listed company, all for an amount of around 300 million francs.""

"These credits would be guaranteed by the joint guarantee of SFFAW and by a pledge covering 70% of the shares of Sidef-Conforama. In addition, the bridge loan must be secured by a pledge of 70% of the shares forming the capital of Dior. The provision of these securities will be authorized by the boards of directors of SFFAW and BSF on August 19. The memorandum of understanding will be signed on August 20, 1980."

"Advertising sells. The proceeds from the sale exceed all expectations and bring in more than 10 million francs, barely a month of the losses generated by BSF.... This episode, extensively commented on in the press, will contribute to maintaining a despicable image of the brothers, financiers with the demeanor of beasts, scattering a luxurious jumble, without conscience or scruple, just as they announce the elimination of nearly a thousand jobs."

"La Fontaine Comme dans les bons feuilletons, les rebondissements ne se font pas attendre. Le lendemain même du second tour des élections législatives, le Crédit Commercial de France, chef de file du pool bancaire, signifie à la société BSF qu’elle ne pourra plus émettre de chèques et mettant sa menace à exécution, rejette un chèque de 220 000 francs. Les autres banques du pool adoptent la même attitude."

"The distribution subsidiaries held by SFFAW, Au Bon Marché, La Belle Jardinière, and Conforama, which are profitable and not under judicial settlement, continue on their own path. The crown jewel, Christian Dior, a subsidiary of BSF, is already the object of all covetousness. There is talk of taking it public along with Conforama."

"This company will be established with a capital of 200 million francs. Its new corporate name will be Compagnie Boussac Saint Frères. Starting from July 1, 1982, it will receive from the provisional administrator the lease management of Boussac Saint Frères for a period of five years. In financial terms, the inventory will be brought in at a value of 1.1 billion francs and the realizable and available assets for 500 million francs, all payable at the end of the five years. The royalty to be paid to BSF by CBSF will be 0.10% of the tax-excluded turnover."

"They continue their legal guerrilla warfare. They first appeal the December 1983 ruling of the Lille Commercial Court, which had pronounced the confusion of assets of BSF and SFFAW. Then, in June 1984, they request the outright cancellation of the agreement signed a year earlier with René Mayer, on the grounds, in particular, that they did not receive the positions they had been promised and that the financial situation of the Boussac Saint Frères Company had significantly deteriorated and no longer allows for the presentation of a proposal for concordat."

"The first procedure concerns the appeal that the Willot brothers had filed against a judgment delivered on December 23, 1983, which declared the merger of assets between BSF and SFFAW. This decision was part of the conditions for the implementation of the July 1983 agreement between the Willot brothers and René Mayer. Having not been applied, these agreements are now the subject of another annulment procedure initiated by the Willot brothers before the Lille commercial court, which was to take place on October 12, 1984, with a judgment to be delivered in November. Finally, the brothers will not pursue their appeal for various reasons: it does not contradict their position regarding agreements with CBSF, it has no impact on the criminal proceedings they face for misappropriation of corporate assets, it opens the way to a concordat solution, and finally, would reduce the liabilities to be repaid from 3.1 to 2.7 billion francs."

"He agrees to take over the management, but wishes to drop the public works part of its activity, to focus only on the real estate development part, which he considers more conducive to value creation. He surrounds himself with highly qualified executives: Michel Lefebvre, the "giant" of communication and sales, Hughes Motte, a highly skilled technician, Alain Dinin, as secretary-general, today the president of Nexity, Georges Pons, former lawyer and legal director, and finally, he benefits from the advice of Pierre Godé, at the time a lawyer at the Lille bar. Ferret-Savinel becomes Ferinel, specializing in holiday residences by the sea and in the mountains and in housing construction. In this context, he has business relations with Jean-Pierre Willot and his real estate service that are looking to enhance the industrial wastelands of BSF and transform them into building plots."

"Bernard Arnault feels the tide turning and pulls a last ace from his sleeve to clinch the deal. His lack of knowledge in the textile industry is undeniably the weak point of his proposal. Julien Charlier, president of OMC, whom he has already met, can change the game if he agrees to be his advisor. An agreement is quickly reached. OMC becomes the textile industrial operator for BSF. An agreement is rapidly signed. Moreover, it is beneficial for both parties as it can help resolve competition issues between the two groups, specifically regarding household linens and clothing and furnishing fabrics. It is more than attractive for OMC, which will receive a royalty of 0.75% of the revenue from the textile activities under contract and will benefit from a right of first refusal and a 10% discount on the sale price of the concerned department."

"They were also creators and investors. The entire hygiene sector and the Peaudouce and Nana brands were created from scratch by Antoine Willot. This activity allowed for the conversion of a number of textile factories, which would have inevitably been doomed to close. At the time of the brothers' departure, the hygiene business accounted for nearly 40% of BSF's revenue and, thanks to its profitability, Bernard Arnault was able to sell it in 1988 for 1.7 billion francs to a Swedish group... But the financial resources needed to implement their policy were severely lacking."

"Finally, for the detriment of Dior, the seizing by BSF of a part of the capital gains realized on the sale of the SCI owning the Dior buildings on Avenue Montaigne as well as the issuance of two checks of 1,500,000 and 1,200,000 francs intended for a fund transfer to the United States for Korvettes."

"Thus, to allow normal operation of BSF, relying only on credit, especially with interest rates of at least 12%, was not enough to compensate for the chronic weakness of equity and results. The temptation was then great to buy other businesses in trouble to have, at liquidation values, inventories or client accounts that generate cash and immediate capital gains. The takeover of Boussac illustrates well this opportunity of means provided by a kind of headlong rush."