Le Coq Sportif wouldn’t have raked in the full retail value of these sales, but they would undoubtedly have been positive news for the revenue of the brand, owned since 2005 by Swiss private equity firm Airesis, founded by Marc-Henri Beausire. “Strong sales momentum prompted by the Rugby World Cup was observed at the end of August 2023. The visibility afforded by the 2023 Rugby World Cup, and the enthusiasm sparked by the event, have reassured the group of [Le Coq Sportif’s] ability to catch up in the second quarter,” Airesis stated in September, hoping for a happier ending.The business environment did seem quite tough for the brand, and the latest six-monthly results published by Airesis confirmed its difficulties. In H1, Le Coq Sportif’s revenue dropped to €63 million, €1.5 million below the same period the previous year. The company said this was due to a slump in its footwear business and notably a fall in its exports to Spain, while indicating that apparel sales increased by 8% in value — no information was given about volumes. Le Coq Sportif has invested in its production unit in Romilly-sur-Seine, France, expanding it by an additional 3,000 square metres. The extension was inaugurated in June, and is now home to the company’s headquarters.

But Le Coq Sportif is still struggling with profitability. Considerably so. In H1 2022, operating losses amounted to €3.5 million, and they worsened to nearly €6 million in H1 2023. There is little optimism about the full fiscal year’s result.

The losses have stemmed from increased operating expenses, although the brand didn’t have an especially high communication profile in September and October, the Rugby World Cup’s key months, except via the French national team’s players during matches. Brands like Adidas, the French team’s next kit supplier, or Eden Park, seem to have much better anticipated potential challenges, and focused their budgets more effectively on the event.

Loan repayments an issue

There is therefore little chance that Le Coq Sportif’s rugby business will contribute to profitability this year. The company has posted serial, significant net losses since 2019: €10 million in 2019, €19.6 million in 2020, €9.2 million in 2021, and €6.9 million in 2022. Majority shareholder Airesis has of course regularly poured fresh resources into the brand, to stimulate growth. In the Covid and post-Covid periods, Le Coq Sportif, via the Le Coq Sportif International company, also tapped several state-guaranteed loans for a total amount of €27 million, according to official filings, that need to be repaid by 2026.In this context, Le Coq Sportif’s successful 2020 bid to become the official outfitter of the French athletes at the Olympic and Paralympic Games, designed to give the brand a significant international visibility boost with the Paris Games, seems to be heavily hampering its ability to react. At the start of the summer, Beausire told Le Monde he needed “€30 million” in equity capital this year to fund the brand’s Olympics-related initiatives. In early 2023, Beausire told FashionNetwork.com he was looking for a new financial partner, and he eventually turned to the French government. In September, investigative reporting outlet L’Informé revealed that Le Coq Sportif had, after a conciliation procedure, “snapped up, among other things, a state-backed loan (PGE) worth €10 million.” L’Informé added that the company “was flirting with disaster,” and the government wanted to avoid a fiasco a year before the Olympics.Contacted by FashionNetwork.com, the company’s management confirmed that “a conciliation agreement was signed by Le Coq Sportif Group and its partner banks, under the supervision of CIRI [the French inter-ministerial committee for industrial restructuring].” The company provided further context, stating that “like many manufacturers that have chosen to produce in France, Le Coq Sportif is facing a significant rise in manufacturing costs, as well as soaring inflation. Inflationary tensions have followed the pandemic, a crisis that severely affected the Group. Thanks to the support of the State and public authorities, of its banking partners, shareholders and especially its employees, suppliers and customers, the Group is fully engaged in dealing with the most wonderful challenges French sport has had to face in decades, the Rugby World Cup and the Paris 2024 Olympic and Paralympic Games.”Thanks to the agreement reached with the Treasury, Le Coq Sportif is expected to have the resources needed to outfit the French athletes at the next Olympic and Paralympic Games. It will also have to find ways of exploiting this exceptional opportunity in terms of visibility and commercial success, while global players such as Decathlon and the LVMH group will also be active as Olympics partners. The stakes are high for Beausire, who needs to ensure that the Olympic endeavour will not turn into a wrecking ball for Le Coq Sportif.