Parent company Ludendo, owner of the toy brand La Grande Récré, will close 53 out of 252 stores in France.
After two months in receivership, La Grande Récré’s parent company, Ludendo, has announced the closure of 53 integrated, unprofitable La Grande Récré stores. The company, which generated 460m euros in sales for the year ending at the end of February 2017, will keep 109 stores open from a total of around 250. A further 88 franchised stores are not involved in the planned closures, meaning that the majority of profitable stores will remain open.
In total, more than 200 employees could be affected by the closures, plus approximately 50 staff based at the company’s headquarters.
Founded in 1977 by Maurice Grunberg, the Ludendo group, whose flagship is La Grande Récré, specialises in games, toys, parties and recreation for children and families.
At the end of 2015, after initial financial difficulties, the group had been forced to close some 50 stores and to transfer around 40 other franchises. But business did not recover, and after a disappointing Christmas season which saw the company down 5.6%, Ludendo was forced to declare itself in cessation of payments. The company was plagued by rapid growth of its fleet and a series of expensive acquisitions, including that of the British Hamleys, which was then resold. Ludendo, which was finally released by its creditors, was struggling under a debt of 105m euros, a situation that forced boss, Jean-Michel Grunberg, to announce the search for a new investor in late 2017.
A spokesman has stated that the group’s priority is a continuation plan, denying rumours that suppliers are no longer delivering to stores. To this end, shareholders have met with various sources of funds as well as English investors.
Steve Reece, CEO of Kids Brand Insight, is of the opinion that the news is not catastrophic: “How many times have we seen retail chains keep expanding until they have a bottom 25% of stores which may be driving up topline sales but which really can’t be adding much by way of profit?” he wrote, pointing out that, “a quirk of the company is that nearly 90 of total stores are franchised, and are unaffected according to the recent announcement. So the group would keep the most viable 109 stores going. We have firm action towards addressing the challenges for the company but with promise of a smaller but stronger group emerging from the debacle, with the majority of stores intact – here’s hoping this is enough to turn things around and keep this much valued toy retailer trading.”