La Redoute Close To Being Sold To Management Team

Luxury goods group Kering is poised to sell its La Redoute catalogue and online business to management with a 'significant' injection of cash.

The Paris-based group, which also owns Gucci, has entered exclusive talks to sell the business and expects to complete the deal in the first half of 2014. Kering wants to focus on selling luxury and sports brands.

The group had four offers for the business and chose to pursue one from a group fronted by La Redoute chief executive Nathalie Balla and chief administrative officer Eric Courteille of the Redcats home shopping division, which is being broken up and which includes La Redoute. 

The Relais Colis home delivery business will also be sold as part of the same deal. Kering will invest in the company's transformation and provide a 'significant' infusion of cash, it said.

Kering said in November that profits would drop significantly this year due to the cost of the sale and from other one-off cost related to the Puma sports brand. The management team has pledged to minimise job cuts.

The break up of Redcats and the sale of La Redoute has been planned since 2010. Earlier this year Nordic Capital, a Swedish buy-out fund, agreed to purchase Redcats' Scandinavian brands Ellos and Jotex for €275 million. Proceeds from selling parts of the Redcats division has so far exceeded $1 billion.