As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Mathieu Grodner, third generation member and CEO of Groupe Simone Pérèle. His grandmother, a pioneer and visionary, started her first atelier in Paris back in 1948. Today, Simone Pérèle is an international group that designs and manufactures apparel and fine lingerie serving customers worldwide.
The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted?
Our businesses stopped operating as soon as the lock-down was promulgated. That was unprecedented. Our businesses were not prepared for such a violent cease of activities. Our employees showed an exemplary behavior though as they adapted fast to the situation and were committed in line with the interests of the business, in a context where their personal situation was somehow complicated. The business carries strong values with meaning, such as sustainability, authenticity and respect; all rooted in our history back to the founder, my grandmother. Those values represent our DNA and are the pillars to which employees can relate in times of crisis. There are of course some differences among people in the pace of adaptation depending on the generation they belong to, but overall, the adaptation to the crisis was natural.
This crisis could also be a test for any family in business. What appeared clearly in our case is that we could count on a strong family cohesion. Our unity was not only a facade but a socle with strong foundations. The education and governance work we have done over generations has paid-off.
How did these changes translate into initiatives (or strategies)?
Our main priority has been to ensure the safety of our teams. Depending on the nature of their work, the employees were either allowed to work from home or had to work part time to accommodate the new situation. As we operate in different countries, we had to manage these adjustments while accounting for the different stages of the pandemic and the confinement restrictions.
Our other priority has been to ensure the financial health of the company. Given that the production activity and our shops were shut down, we wanted to avoid cash-flows difficulties. The family business is 100% owned by family shareholders who are very committed to the Simone Pérèle project and its sustainability. They renewed their commitment and their trust by providing exceptional financial support during this period. Our communications became more regular in order to reassure and inform them about the strategic challenges we were encountering. We also relied on the support of our other partners and used the state-guaranteed loans that the French government has encouraged to help businesses during the pandemic.
Family businesses are known for their values of social responsibility, acting as ambassadors of the territories in which they are rooted. How did these manifest themselves in your country?
Simone Pérèle is a French or even a Parisian company with a close relationship with its territory. That is where it all started. We are proud of our French know-how, thanks to which we can export products with quality, authenticity, and elegance. I would say that this is more than an attachment to a territory.
During the lockdown, we used our tools and know how in the textile industry to create masks prototypes that were certified by the AFNOR. On a voluntary basis, our workers showed a remarkable behavior, producing masks to help with the shortages during the lockdown. The masks were distributed to our staff, to the communities, the city halls, the hospitals, and other businesses close to our factories.
How are you preparing for the post-crisis phase, in line with medium or long-term challenges the family business will be facing?
This crisis showed us that we have underestimated the capacity of adaptation of the business and taught us several lessons for the future. We are considering moving towards more work flexibility, as working from home proved to be efficient. This could also attract new talent and contribute to a new type of relationship between the business and the employees.
This crisis creates opportunities despite the constraints. Business developments are going to be accelerated as compared to before. It allows to take a step back and make faster decisions such as launching new projects of transformation. The long-term vision and ambition remain. It is a matter of going back and forth between the short term and the long-term visions towards business continuity. Whereas 2020 may be the year of damage control, 2021 may be the year to restart and accomplish a real transformation of processes and business models towards sustainability.
With a positive attitude, you mentioned that this crisis is an opportunity. Reflecting on the family business specificity, what does it take to leverage it as an opportunity?
The businesses that will survive are the ones who stay in motion however, this is not a sufficient condition. This crisis shows that a stronger form of resilience characterizes businesses with a legacy around the know-how and the human beings. Both shareholders and collaborators identify and connect with this legacy to provide support, which is necessary to survive the crisis. Human connection is definitely a key factor.