* Unions reject restructuring deal on compensation dispute
* Management says now has to ask court to intervene
* One possibility now would be a court-ordered restructuring
(Recasts with La Redoute statement, adds details)
By Dominique Vidalon
LILLE, France, March 21 The future of France's
loss-making mail order business La Redoute hung in the balance
on Friday after its main unions rejected a restructuring deal
and management said it had no other option than asking the
courts to intervene.
In December, parent luxury group Kering reached a
deal to sell the business for a symbolic 1 euro ($1.38) to La
Redoute's chief executive Nathalie Balla and Eric Courteille,
chief administrative officer of Redcats, La Redoute's immediate
Closing the deal, however, hinged on unions approving the
terms of the restructuring plan, in particular severance
The CGT union said earlier that neither it nor the two other
unions, the CFDT and Sud, had agreed to back the proposals by
the Friday 1300 GMT deadline set by La Redoute's management.
"The management of La Redoute regrets the dead end that La
Redoute is in," La Redoute said in a statement.
"In the absence of a deal on the social plan and in
anticipation that Kering will stop funding La Redoute's
operations, management must inform the Lille commercial court of
the financial difficulties facing the business," the company
said. It said this procedure would enable it to assess where its
options now stand.
Mario Califano, a lawyer for La Redoute staff, said that one
possibility was that La Redoute might be placed under
court-ordered restructuring. Under this procedure, the court
decides to name an administrator who will look at ways to secure
the company's future or eventually decide to liquidate it.
Kering had no immediate comment on the unions' decision.
La Redoute, which sells a wide range of products, from
furniture and bed sheets to clothing and sex toys, has been
fighting to stem a decline in sales, hit by fierce competition
from specialist and discount internet retailers despite its own
La Redoute is the last retail business Kering, formerly PPR,
needs to sell to complete its transformation into a group
focused on luxury and sports goods brands, a process which
started in 2006 with the disposal of retailer Printemps.
La Redoute, which employs around 3,400 staff, including
2,400 in France, announced in January that 1,178 jobs would be
cut within the next four years under its restructuring plan,
including 700 forced departures.
Kering, which has already injected 400 million euros into La
Redoute since 2008, has agreed to put in another 520 million
euros to cover its losses and finance its restructuring,
provided the unions approve the plan.
The dispute with unions mainly centered on severance
packages. La Redoute Management had offered a minimum
compensation for voluntary departures of 20,000 euros when
unions were asking for 40,000 euros.
($1 = 0.7255 Euros)
(Reporting by Pierre Savary and Dominique Vidalon; Editing by
Lionel Laurent, Natalie Huet and Andrew Callus)