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PARIS (Reuters) -The shareholders of fashion group SMCP on Friday voted to dismiss five board members associated with its former majority owner Shandong Ruyi, including board president Yafu Qiu and his daughter Chenran Qiu, and add three new independent members.
SMCP, the owner of contemporary French fashion labels Sandro and Maje, said in a statement on Friday that the board would meet in the coming days to appoint a new chairman.
The board reshuffle follows legal battles between shareholders of the French fashion group dating back to last autumn.
Tensions have been high between European TopSoho, a unit of the conglomerate Shandong Ruyi, and its former debtholders since it defaulted on 250 million euros of bonds exchangeable into SMCP shares in October.
Following the default, the bondholders, which include asset manager BlackRock and an affiliate of private equity firm Carlyle and are represented by a company called Glas, obtained a 29% stake in SMCP and 25% of its voting rights.
Following a request from Glas, which has said it intends to sell its stake in the fashion group, the Paris commercial court in November named a representative who scheduled Friday's shareholder meeting to vote on dismissing board members associated with Ruyi.
A last-minute effort by European TopSoho to block the meeting was rejected by a judge at the Paris court earlier this week.
“We believe that the proposed board changes would be another positive step in the ownership transition saga,” said Kathryn Parker, analyst with Jefferies, in a research note ahead of the shareholder meeting.
Shandong Ruyi set out to create a luxury clothing empire, embarking on a buying spree that included London-based suitmaker Aquascutum and Paris-based fashion house Cerruti 1881, as well as SMCP -- purchased from private equity firm KKR in 2016.
But the conglomerate has struggled under the weight of its debts and its financial difficulties worsened with the COVID-19 pandemic.
SMCP marked a recovery, with third quarter revenues back close to pre-pandemic levels.
(Reporting by Mimosa Spencer, Dominique Vidalon; Editing by Kirsten Donovan and Jonathan Oatis)