A FTSE100 leisure group decided to reduce their European exposure by disposing of loss making, non-core assets in Germany, France, Italy and Belgium.

A pan European buyer was found who could easily consolidate the profitable parts into their own businesses but left behind a rump of underperforming and unwanted assets including their employees. Our client bore the responsibility for the costs inherent in disposing of these unwanted assets.

It has to be said that the client and their UK based advisers had underestimated the costs of closing businesses outside the UK, broadly assuming that UK style TUPE regulations would apply. A superficial reading of the rules could lead one to such a conclusion but in practice the barriers to rapid, inexpensive closures in these countries are much tougher.

When EIM was recommended by the client’s auditors the German closure programme had already started and had been outsourced to a local specialist law firm. In France, Italy and Belgium it was clear that the hurdles ahead required more than simply leaving the problems with lawyers. In these countries we advised that a rethink was necessary on the group’s assumptions on timescales and costs of closures.

Rather, a more hands-on, consensual consulting approach would succeed as the workforces were unionised, angry and disenchanted, each country having the challenge of its own unique, pro-employee protection processes and legislation. In such highly charged scenarios it was agreed that only deeply experienced local human resources expertise would succeed with access to local lawyers as appropriate and a direct reporting line to EIM and the UK parent’s restructuring team.

EIM London sourced three interim country project leaders through its Paris, Brussels and Milan offices within 48 hours who were presented to the client and set to work to devise strategies and budgets. In all cases the advice was clear – business closures in Europe are complex and politically charged.

The resulting processes take much longer and the costs are much greater than we expect in UK, particularly if the workforces have been marginalised prior to closure announcements. In all cases, however, the three individual country projects were completed within our time budgets.

It has to be said, however, that in Italy and Belgium the processes to satisfactory and honourable conclusions were predicated on pragmatism and generous financial settlements being established prior to initiating the legal processes. In Florence there were concerns that the case would be politicised during election time in the then Prime Minister Renzi’s constituency.

Fortunately he had more pressing issues on his mind. In Belgium the consensual approach enabled EIM and the workforce to bypass the extended formal process by agreeing an early collective agreement at a ‘sensible’ settlement. In Belgium and Italy the client readily agreed that such timely settlements could only have been achieved through the leadership and expertise of EIM’s local interim management resources.

In France, however, while the client realised that the closure process and imposition of the ‘Social Law’ would be drawn out and expensive, they had been poorly advised regarding exiting a business.

A very different story emerged when EIM’s senior HR executive was brought in. It became clear that there was no project strategy in place and a high risk of social conflict, including potential strikes and demonstrations.

A history emerged of incompetent, laissez faire local management dealing with a poorly educated, angry workforce.

There was intransigence from highly vocal unions who had rejected early cash settlements, not to mention likely interference from public authorities and politicians, as well as negative media coverage as the case quickly came under the microscope of the ‘Macron Law’, the outcomes of which were carefully monitored, in the highly sensitive pre-election period. Understandably the client’s earlier low risk, short term expectations in France was history.

  • The EIM interim executive prepared a strategy for success which entailed:
  • Preparing a new, workable timetable and flexible budget;
  • Defining a project implementation strategy taking into account the risks (social, legal, media, political and financial) and minimizing them;
  • Preparing a solid economic justification for closure to convince the politicians and unions and satisfy the ‘Macron Law’;
  • Preparing convincing communication messages whose clear narrative was essential;
  • Defining a range of measures to mitigate negative social consequences and to safeguard continuing employment;
  • Demonstrating compliance with the redundancy regulations


In Belgium and Italy, our local expertise and a pragmatic, consensual approach led to timely and sensible settlements – higher than the equivalent in UK but acceptable nonetheless.

In France, we achieved a successful, signed off conclusion (not without some reluctance from the parent company) after eight months of diligent adherence to the plan – with no strikes, minimal political interference and reputational damage, compliance with the ‘Social Plan’ involving redundancy and alternative employment opportunities, and a lot of hard graft from the EIM ‘defence team’.

Looking ahead we believe that it is highly likely that more UK companies will now be thinking about ‘restructuring’ their European operations which may well include disposals or significant operational and structural change. Our client’s experience above is a good example of the importance of early planning, consensual dialogue and the utilisation of high level local consulting / interim executive expertise to achieve desired results within sensible budgets.

For more information or a confidential discussion please contact James Wheeler on:

direct line: 020 7290 1441
Email: j.wheeler@eim.com