French Fashion Firms Said to Seek Loan Changes Amid Retail Slump

French fashion companies Vivarte SAS and Camaieu International SAS are seeking to amend the terms of their loans amid a slump in retail sales, according to people familiar with the matter.

Vivarte, which owns the Kookai and Caroll brands, asked lenders to waive quarterly tests on minimum earnings until February 2016 to avoid breaching loan covenants, said two people, who asked not to be identified because the request is private. Camaieu, owned by private-equity firm Cinven Ltd., requested a 15 percent increase on the maximum amount of debt it can hold in relation to its earnings, two other people said.

French retailers are feeling the pinch amid an economy that has barely grown over the past three years and record-high unemployment. Household spending on textile, clothing and leather products was at 3.9 billion euros ($4.9 billion) in October, the weakest for that month in 13 years, according to data from the French Statistics Office.

Marie Peterson, a spokeswoman for Cinven employed by FTI Consulting, declined to comment on Camaieu’s loan amendment request. A spokesman for Vivarte in Paris, who asked not to be identified citing company policy, declined to comment on the company’s loan performance and amendment request.

Camaieu is seeking to increase its allowed leveraged ratio to 7.6 times until March 2017 from 6.6 times, the people said. The Roubaix-based company, which already sought to extend the maturity and relax covenants on 1.2 billion euros of buyout loans in May 2012, has about 1 billion euros of loans outstanding, one of the people said.

Vivarte was taken over by creditors Alcentra Ltd., Babson Capital Management LLC, Oaktree Capital Group LLC and Goldentree Asset Management LLC in October after they agreed to restructure the company’s 2.8 billion euros of loans.

Paris-based Vivarte’s 800 million euros of senior loans fell to about 25 cents on the euro from 63 cents last month, the people said.