BHV in receivership: who pays for a department store's bankruptcy?

According to franceinfo, the Parisian department store BHV has been placed in judicial reorganisation (redressement judiciaire, the French equivalent of administration). The procedure also covers BHV Parly 2, in the Yvelines, and opens an observation period of six months, renewable once for another six. Still according to franceinfo, the management of the company SEGM BHV had recently admitted that the business was insolvent.

That is the facts. What the wire report does not say, and what we do not yet know: the number of employees affected, the amount of debt, the identity of the creditors, the fate of the jobs. Until those figures are available, we will refrain from conclusions. We can, however, ask the question that matters, the one judicial vocabulary conveniently sidesteps: who is going to pay?

The "observation period" is a lovely term. One observes, as one observes a patient, implying the illness is natural. It is a small case of commodity fetishism: we are told that "Parisian retail is struggling" and that "consumer habits have changed", as though some meteorological force had swept the store away. But a retail chain is a set of decisions: about rents, debt, investment, dividends. People with interests made those decisions. The wire report names no one; our job is to remind readers that someone did.

Our reading, which commits only us: the department store is a textbook case of commercial capital confronted with competition. When distribution capacity outruns what customers will buy at a profit, someone must be sacrificed. The pattern, described by Marxist crisis analysis, is well known: overaccumulation, bankruptcies, then restructuring, in which the cost is pushed downwards. Shareholders and landlords have guarantees, ranked claims and legal advisers. Shop assistants have an employment contract, which is the only thing the procedure makes negotiable.

This is where the notion of surplus value sheds light on the case. The staff of a store produce more value than their wages cover; that surplus feeds rents, interest and profits. If the surplus is no longer enough to pay everyone involved, the temptation will be to cut into the most compliant part: the wage bill. We do not claim this will happen at BHV, since the report is silent on it; we say it is the usual trajectory of reorganisations.

Then there is the reserve army. Every job cut swells a pool of workers looking for employment in a Parisian retail sector already fragile, which weighs on the conditions of those who remain. The next six months will show whether jobs are saved or only a brand, that prestigious name which, for its part, still sells very well.