Retail brand Naf Naf finds itself in legal disputes barely a year following its repurchase
Naf Naf Faces Third Bankruptcy as Turkish Owner Requests Receivership
The French women's ready-to-wear brand Naf Naf has been placed under judicial reorganization for the third time in its history, following a decision by the Bobigny Commercial Court on May 30. This new procedure threatens the jobs of 588 employees in France.
This latest development comes after Naf Naf's Turkish manufacturer Migiboy Tekstil requested receivership, citing cash flow difficulties and an inability to meet current liabilities with available assets. The court found that the company's liabilities amount to €44 million, while its revenue in 2024 reached €47 million.
While the receivership procedure avoids immediate liquidation, it opens a period of uncertainty for the stakeholders involved. The French Democratic Confederation of Labor (CFDT) expressed concern, stating that management and the shareholder must prove that Naf Naf can operate temporarily, as stock levels and store sales are critical for the brand's survival.
Migiboy Tekstil had previously pledged to save 90% of the jobs and maintain around 100 owned stores when it acquired Naf Naf in June 2024. The company also committed over €1.5 million to purchase the French brand. Despite these efforts, the ongoing financial struggles may lead to store closures if the recovery plan does not produce positive results.
The court has granted Naf Naf a six-month observation period to restructure and improve its financial situation. It is believed that prospects for recovery exist based on the debtor's statements, activity forecast, and available cash. During this time, Naf Naf will work on re-stocking stores and implementing a new logistics organization, all with limited financial resources.
Naf Naf, a once popular brand of the 1990s, has faced setbacks for several years. Founded in 1973, the brand gained notoriety in the 1980s and launched successful advertising campaigns in the 1990s. However, amidst the Covid pandemic in 2020, the brand was placed under judicial reorganization for the first time.
The current situation represents a dire turn for the fashion industry, as many other ready-to-wear stores, such as Camaïeu, Kookaï, and Jennyfer, are also facing significant challenges. A hearing is scheduled for July 23 to review the progress of the recovery efforts for Naf Naf.
In the wake of Naf Naf's third bankruptcy, questions arise about the brand's future in the fashion-and-beauty industry. The financial struggles of the French women's ready-to-wear brand, despite investment in stocks and efforts to maintain business operations, threaten its survival. Meanwhile, the onset of receivership raises concerns for the jobs of 588 employees, and the uncertainty extends to stakeholders as well.
