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Orchestra Prémaman, expiatory victim of the second hand

The Belgian subsidiary of Orchestra Prémaman extends the closure of stores from 12 to 34.Second-hand and e-commerce are hurting the mid-market.

One tile after another for the Belgian employees of Orchestra Prémaman.Placed at the end of October under judicial reorganization, the childcare and baby clothes sign is now going two notches further in the reduction of the canopy.

Management, which had announced the closure of 12 stores in November, added another 22 stores to the list.Eventually, only 19 Orchestra Prémaman stores should therefore remain in operation, although their future is not 100% guaranteed.

The future does not seem to be brighter for the company, which is also losing its Belgian management.”It’s not a good signal, and even if, within the group, they try to maintain the sign, the question is whether they’ll succeed,” says Myriam Djegham, a permanent employee at the CNE, the Christian employee centre.

In Belgium, Orchestra Prémaman employs 380 workers.The management intends to save 200 jobs and to limit as far as possible the dry layoffs.The first announcement of the closure of 12 stores resulted in 46 departures, with 3 dry layoffs and some 40 transfers to other stores.

Read also | Unions arm Orchestra Prémaman employees against layoffs

Union and management are scheduled to meet again next Tuesday.In the meantime, the company is looking for buyers for the stores.We’re talking about three potential buyers for “a few stores”, without further details.

This restructuring is part of a broader safeguarding plan initiated by the French parent company last September.This procedure should enable it to restructure its debt (235 million euros at the end of August 2019).In total, between 100 and 150 of the group’s stores are expected to close down worldwide, including 34 in Belgium.

Excess optimism

Created in 1995 by Chantal and Pierre Mestre, Orchestra has undoubtedly had eyes bigger than stomach.The French company, which acquired Prémaman in 2012, has developed strongly internationally (Spain, Belgium, Switzerland, Greece, Italy, Morocco, Turkey, Cyprus, China, Russia and the United States).”Our mistake is that we have sinned by over-optimism.From 2010 to 2015, we have recorded strong growth and carried out company buyouts.We didn’t get them up to speed quickly enough and were slow to gain momentum in childcare, a sector where it takes time to be known and recognized,” Pierre Mestre said last September.

The founding president of Orchestra Prémaman also blames the drop in the birth rate, which inevitably weighs on the purchase of childcare articles.But for the experts, it’s a little short.According to them, the childcare sector is above all faced with the spectacular rise of second-hand childcare, pushed to the back by online commerce.

In one year, sales of second-hand juvenile products jumped by 30%.It already accounts for between 15 and 20% of the global market.Not to mention the emergence of leasing applications for childcare equipment (prams, pushchairs, etc.).”The second hand is the biggest disrupter, but it makes economic sense.For years, there has been value creation on expensive products with a very limited life cycle, which has created an economic imbalance,” explains Pierre-Alexandre Billiet, CEO of the trade magazine Gondola.

The boom in the second commercial life of children’s products has led some brands, such as Colruyt subsidiary Dreambaby, to devote part of their shelves to resale.

Read also | Released by its French parent company, Orchestra Prémaman dives

Orchestra Prémaman also suffers from its mid-range positioning on the market.”Young parents make much more polarized choices,” says Gino Van Ossel, an expert in the retail sector at Vlerick Business School.Those who can’t afford much turn to actors like Primark.This is evidenced by an explosion in low-cost offerings in recent years.And those who can afford it are more likely to go for high-end brands”.

The expert from the Vlerick School also puts his finger on the lack of success of Orchestra Prémaman in Flanders, where it suffers from a “not very modern” brand image.As a result, all shops in the north of the country are expected to close, with the exception of a sales area in an outlet in Mechelen.

Pierre-Alexandre Billiet also blames the structural heaviness of a company like Orchestra Prémaman.”The market is difficult overall, but in Belgium smaller companies like Torfs do better because they are more flexible and use alliances in case of difficulties”.

Nevertheless, overall, the Belgian childcare market is shrinking.This is reflected in the decline in sales of baby clothing (see table opposite).A large part of the blame lies with online purchases on foreign sites, according to Dominique Michel, CEO of Comeos.”Today, one out of every two online purchases is made abroad.And it’s not over yet: a quarter of the population still doesn’t buy on the Internet,” he says.

https://en.wikipedia.org/wiki/Global_trade_of_secondhand_clothing