A little bad luck, a lot of mistakes, competition from Action and Temu... How Gifi, present in the lives of the French for 45 years, collapsed in barely 3 years

Since Tuesday, it's official. The Gifi distribution brand, created in France in 1981, is in receivership. The Toulouse commercial court, seized by the group itself, ordered a six-month observation period, and set a new hearing for January 8 to assess the evolution of the company's financial capacities.

“The stores remain open and the teams are fully mobilized for the end-of-year commercial highlights. Management remains in office” alongside the administrators and legal representatives, attempts to reassure management. An expert in business crisis management, Patrick Puy - appointed chairman of the management board on October 12 - is in charge in particular in order to find a way out of the one that Gifi has been going through since 2023.

An "industrial disaster" Just a few years ago, however, the group was a national jewel, bringing together all the ingredients of a French capitalist epic: a founder and charismatic leader, Philippe Ginesti, who, a pioneer in the market for discount home goods, was able, thanks to striking slogans, to make people love his brand and open more than 600 stores throughout the national territory. So what happened that could explain his fall? This may come as a surprise, but the trigger was a “simple” operational problem.

In 2023, the implementation of a new integrated information system, which manages communication between stores and warehouses, turns into an industrial disaster. It disrupts purchasing management, inventory management and store supplies, causing stock shortages lasting several weeks. And as the shelves become empty, the group's turnover and cash flow increase, with losses estimated at more than 100 million euros, recalls Olivier Meier, professor specializing in strategy and management at the University of Paris-Est Créteil.

More than 25 million in uncovered cash The damage then begins to pile up. Gifi, which struggles to pay its suppliers on time, loses their trust. Credit insurers downgrade the company's rating, many suppliers ask to be paid before delivery, and cash flow problems set in.

A vicious circle is setting up, all the more pernicious as it comes just at the time when formidable new competitors are arriving in France, explains Olivier Meier: the Dutch supermarket chain Action, "which is based on an ultra-standardized offer and an optimal logistics model with very low prices", as well as the Chinese platforms Shein and Temu, which are starting to gain significant market shares. The icing on the cake: “unfavorable weather conditions from April 2024, (which) penalized sales of seasonal products representing approximately half of the group’s turnover,” notes the court in its decision. Result: in 2025, the Ebitda (profitability) of the group, expected at 9 million euros, comes to -100 million euros, according to the court decision.

Machine-translated from French