(Paris) Recent changes within the Club Med management team, in search of a new financial partner, raise concerns about the intentions of its Chinese shareholder Fosun, who on the contrary assures that it wants to “maintain and respect its French roots “.
The group’s number two, Michel Wolfovski, resigned a few weeks ago from his mandate as deputy general manager, sparking speculation about a possible “takeover” of the Fosun conglomerate, which acquired a stake in the pioneer of holiday villages in 2010. , before acquiring the majority in 2015.
“The recent resignation of Michel Wolfovski from his corporate offices as well as rumors of a threat of relocation of Club Med’s head office to Shanghai and a probable change in governance are causing concern among the company’s employees,” laments Christian Juyaux, Club Med coordinator with the European and global union federations of hotel, catering and tourism workers (Effat-Uita).
In a press release published last week, the union representative requested “information on the decisions that the group plans to take”.
“There is no intention to move Club Med’s headquarters from Paris to Shanghai. Fosun has always considered Club Med a French treasure and will continue to maintain and respect its French roots,” responds Fosun.
“They believe in this brand and support it,” specifies a source close to the matter, recalling the 800 million euros invested by Fosun in Club Med since the acquisition, including 130 million during the difficult period of COVID-19 .
“They want stability and international success for Club Med. For this, as a shareholder, they must plan for the long term,” the source continues.
The fact remains that internally, the arrival of new Chinese representatives on the board of directors raises questions, leading the newspaper Les Échos, through its editorialist Éric Le Boucher, to make it a “matter of cultural sovereignty”. The journalist is worried about a “decapitation of the man who straightened it out, Henri Giscard d’Estaing, at the helm since 2002”.
A flagship of tourism created in 1950, Club Med has 67 sites in 40 countries and employs nearly 25,000 “Gentils Organizers” and “Gentils Employés” (aka GO and GE). In 2023, it published record results, the fruit of its upscaling strategy, with a turnover approaching 2 billion euros for the first time and a net profit of 99 million.
Some observers highlight Fosun’s level of debt and the risk that the group will use Club Med’s cash to recover liquidity, a concern shared by the union representative.
“The debt has decreased over the last three years”, underlines the close source, with a “debt ratio of 50% and very good refinancing capacities”.
Fosun’s consolidated debt at the end of 2023 was 211.92 billion renminbi (about $29 billion), down 15 billion RMB (about $2 billion) from the end of 2022, according to the conglomerate, which owns also in France the fashion house Lanvin and St-Hubert margarines.
“Since 2020, Fosun has implemented a strategy focused on core activities, with Club Med as one of its main assets, which Fosun will retain as a majority shareholder,” assures the close source.
In September, Henri Giscard d’Estaing told AFP that the group was considering opening up its capital to support its growth.
Since then, American funds, investors from the Gulf and the Maus family, owner of Lacoste, according to Les Échos, have shown signs of interest before giving up due to a price considered high, basing it on a valuation of nearly 2 Billions of Euro’s.
According to the media La Lettre, the Luxembourg fund CVC Capital partners is in discussions with Bpifrance to put together a joint offer. Asked by AFP, the public investment bank and Club Med management did not wish to comment.
“The success of Club Med arouses the interest of investors,” estimates the close source, according to whom Fosun is open to the arrival of a partner “if its strategy is in line with that of Club Med.”
