The women’s fashion brand Naf Naf, employing nearly 600 people, has been placed under judicial recovery due to “cash flow difficulties,” according to a decision from the Commercial Court of Bobigny, France.
While this ruling avoids immediate liquidation, it introduces a significant period of uncertainty, the CFDT union said in a statement.
This is the third such procedure for the French company, which was acquired last June. Its Turkish management has expressed intentions to “continue maintaining the brand and present a recovery plan,” according to the court’s decision.
Workforce down from 650 to 588 in six months in France
The company employs 588 people in France, but had 650 employees over the past six months, the court noted.
Facing bankruptcy, Naf Naf is struggling with cash flow issues it cannot overcome and is unable to cover its outstanding debts with available assets. Its liabilities amount to €44 million, while its revenue for 2024 reached €47 million.
However, the court believes there are recovery prospects based on debtor’s statements and future business projections, alongside available cash flow.
Six-month observation period
Naf Naf has been granted a six-month observation period, with its situation to be reassessed at a hearing scheduled for 23 July.
In June 2024, Turkish acquirer Migiboy Tekstil committed to saving 90% of jobs and retaining a hundred stores, having offered over €1.5 million to take over the brand.
Migiboy Tekstil successfully preserved 521 out of 586 jobs and a hundred stores in France, also acquiring subsidiaries in Spain, Italy, and Belgium.
The union emphasised the need for management and shareholders to prove that Naf Naf can continue operating at least temporarily. This, it said, requires adequately supplying stores and coming up with a new logistical organisation, amid tight financial constraints.
Stores will receive stock as there are 800,000 items in inventory, with the company selling 140,000 items per month, management argued before the court.
Union braces for store closures, downsizing
However, the CFDT feels that even if the recovery plan succeeds, drastic reorganisations, including store closures and further downsizing at headquarters, are very likely.
The iconic brand from the 1990s faces ongoing troubles, with its third judicial recovery request in five years.
Founded in 1973 by brothers Gérard and Patrick Pariente, Naf Naf gained prominence in 1983 with a cotton jumpsuit in various colours selling over three million units, according to the brand’s website.
The commercial success continued into the 1990s with notable advertising campaigns, featuring the slogan 'Le Grand Méchant Look.'
