Blunder: Retailer announces CEO as ex-BCG, but he wasn't

29 June 2020 Consultancy.eu

Belgian fashion retailer FNG Group has blundered in a press statement announcing its new interim CEO.

On June 8, FNG Group – the parent of some fifteen fashion brands – informed the media that it has hired an interim CEO to lead the firm through its current period of crisis. Previously, the top position was held for a month by board member Manu Bracke, who succeeded Dieter Penninckx in early May.

Penninckx founded FNG Group in 2003 together with his wife Anja Maes and Manu Bracke. They started off in the segment for kids clothing, and following a number of acquisitions FNG Group transformed into a shopping chain with a focus on clothing for women. Today, the group generates around half of its revenues in Belgium, with the largest chunk of the remainder earned in the Netherlands. 

Already before the covid-19-induced downturn the pressure starting mounting on FNG Group. When it bought the Scandinavian ecommerce company Ellos Group for €229 million in June 2019 everything seemed rosy, but since the clouds have gathered. The retailer closed 2019 with a major loss, and in the first quarter of 2020 a growing number of rumours surfaced about potential financial misconduct.

Blunder: Retailers announces CEO as ex-BCG, but he wasn't

In response, Belgium’s Financial Services and Markets Authority commenced an exploratory study into the matter, and in May announced that it suspended FNG’s public listing and launched a formal investigation. Since, debtors have rushed to command the retailer to repay its debts, bringing the firm into financial difficulties. 

The debt pile, which has been exacerbated by the corona crisis and amounts according to Dutch bank ABN Amro to around €576 million, has forced the company to take drastic cost cutting measures, including closing 47 shops in Belgium and axing 300 employees from its headcount. 

Yves Pollé

To guide the firm through the crisis, FNG Group brought the experienced crisis manager Yves Pollé on board. He has been tasked with leading het turnaround plan, considering all options including bankruptcy or continuing with a trimmed operation. Manu Bracke has meanwhile returned to his previous role of chief operations officer. 

Notably, in its press release introducing Pollé, FNG Group stated that he had previously worked for strategic consulting firm Boston Consulting Group (BCG). Pollé in fact had mentioned on LinkedIn that he was associated with BCG Turn, which is the firm’s restructuring wing. However, instead of fact checking it, FNG Group blindly sourced the information. 

The prestigious Boston Consulting Group – which keeps a close eye on its alumni and its brand usage – was understandably disgruntled with the mention. The firm’s lawyer contacted Pollé, reminding him of the fact that he never worked for the consultant. Pollé has since removed the reference to Boston Consulting Group from his LinkedIn profile.

Embarrassed by the situation, a spokesperson of FNG Group has now confirmed that Pollé never served the global consulting firm. His profile was part of BCG Turn’s database (Pollé works as an independent consultant) in Belgium, however, to date, he had not yet been staffed on an engagement through BCG’s network.