* La Redoute management offering Kering buyout
* Kering said offer is 'responsible' in terms of jobs
* La Redoute disposal will mark end of Kering's retail
* Lille mayor Aubry says buyers asked Kering to inject 600
(Adds Kering CEO quote)
By Astrid Wendlandt
PARIS, Dec 4 Kering has entered into
exclusive talks to sell mail order and online retailer La
Redoute to its managers in a fresh attempt to offload the
La Redoute is the last retail business Kering needs to sell
to complete its transformation from a retailer to a group
focused on luxury and sports brands, a process which started in
2006 with the disposal of the retailer Printemps.
Kering issued a profit warning last month, blaming one-off
charges related , which owns luxury brands Gucci and Yves Saint
Laurent, to the disposal of La Redoute and the restructuring of
its sports brand Puma.
On Wednesday the company, previously known as PPR and before
that Pinault Printemps La Redoute, said it was in talks with La
Redoute's chief executive Nathalie Balla and Eric Courteille,
chief administrative officer of Redcats, La Redoute's immediate
Financial details of the management buy-out (MBO) were not
La Redoute sells a wide range of products, from furniture
and bed sheets to clothing and sex toys and despite its own move
online, it has been struggling to beat fierce competition from
specialist and discount internet retailers.
Kering has injected more than 400 million euros ($542
million) into La Redoute since 2008 and would be ready to inject
at least another 300 million in order to cover its losses for a
few years more and finance its restructuring, sources close to
the matter have said.
Kering said it would recapitalise both La Redoute and its
deliveries partner Relais Colis as part of the deal to "ensure
that both companies enjoy a healthy financial position backed by
a significant cash surplus."
But it has also said significant job cuts will be needed in
restructuring La Redoute, sparking protests from staff and local
politicians in its traditional base in northern France, as well
as demands from Lille's Socialist mayor, Martine Aubry, for
guarantees over its future.
Aubry criticised Kering for not doing enough to bring La
Redoute's logistics, IT systems, and staff training up to date
sooner to enable it to compete in a fast-changing market.
Unions fear around 700 jobs are at risk. La Redoute has
around 2,500 staff in France, where the government is battling
unemployment at a near record 10.9 percent.
Aubry said in a statement on Wednesday the buyers had asked
Kering to inject 600 million euros in La Redoute and she was
demanding information about the impact the sale would have on
"The Kering group and the buyers it has chosen must look
after the future of every employee and strongly support them in
this crucial phase for the company," Aubry said in a statement.
A company spokesman declined to comment on the 600
Kering Chief Executive Francois-Henri Pinault told Le Figaro
newspaper in an interview that Kering would inject "several
hundred million euros" in La Redoute.
Pinault added that "the exact sum would be decided once the
negotiations were over."
But Kering said the management's buyout offer met conditions
which included a "responsible plan in terms of job management
and respect for the region", and "a long-term, appropriate and
realistic industrial plan to continue the necessary changes to
the business and ensure its long-term future and development."
In 2012 La Redoute made a loss of 50 million euros on sales
of 1.1 billion euros, of which just 300 million came from
Kering said that under the terms on offer the buyers would
create a new entity co-chaired by Balla and Courteille, who
would invest in a personal capacity and jointly have the
majority shareholding, with the remainder owned by a team of
The company would acquire all the shares of La Redoute,
Redoute International and Relais Colis.
Media reports had said Kering received several rival offers
for La Redoute which involved real estate company
Altarea-Cogedim, U.S. investor The Gores Group and an
entrepreneur from northern France.
(Additional reporting by Pierre Savary in Lille and Pascale
Denis in Paris; Editing by Mark John, Greg Mahlich and David