Taking Stock: Charity Gone Awry… Jourdan Sold…

CHARITY GONE AWRY: Soles4Souls has filed a federal lawsuit claiming that about 16,000 pairs of donated Minnetonka Moccasin shoes ended up for sale on eBay rather than being shipped to needy people in Africa. The suit was originally filed in the U.S. District Court for the Middle District of Tennessee on Dec. 11 against six defendants, including Concord, Va.-based Gleaning for the World Inc., a charitable distributor. According to the lawsuit, Soles4Souls received the donated shoes from Minnetonka Moccasin Co. on Oct. 10, 2007. Under the terms of the donation, Nashville, Tenn.-based Soles4Souls would give the shoes to African citizens. The footwear charity then contacted Gleaning, and the two organizations agreed via contract that Gleaning would distribute the shoes in Africa. However, the lawsuit maintains that Gleaning transferred the shoes to another charity organization, For the Kids Inc. — and that the product later changed hands four more times before being sold on Ebay.com by Jeanne Re. “Defendants shared a common purpose and each knew of the other defendant’s intent,” the lawsuit said, adding that the six defendants are “liable to Soles4Souls for civil conspiracy.” Soles4Souls discovered that the shoes, worth more than $1 million at retail, were being sold on the open market and later purchased them from Re to “fulfill its obligations to Minnetonka and maintain its charitable objectives and reputation,” the suit said. Soles4Souls is seeking a minimum of $250,000 in damages in the case, as well as unspecified punitive damages.

Reached by phone last Wednesday, Soles4Souls founder and CEO Wayne Elsey told Footwear News that the charity has a network of 1,000 qualified third-party distributors, who are often used to help create efficiencies in transporting donated shoes, such as by shipping them along with medical supplies already going to a certain region. Gleaning “is the only one we’ve had a problem with,” he said. Elsey added that the original, confiscated Minnetonka shoes — discovered because they were of a certain discontinued line — were en route to Africa as of last week and that Minnetonka has already donated more product to Soles4Souls. Going forward, Elsey said his organization is committed to protecting “the integrity of the donors” and that the firm has “tightened up the [donation] agreement [signed by third-party distributors] even further.” Minnetonka declined to comment, and Gleaning for the World did not respond to a request for comment.


JOURDAN SOLD: Groupe Royer, which bills itself as France’s largest footwear importer and distributor, has come to the rescue of Charles Jourdan. Royer’s acquisition of the liquidated luxury footwear brand was green-lighted last week by the commercial court of Romans-sur-Isère. In November, the court annulled the sale of the brand to Costa Rica-based investment fund Finzurich after it failed to deliver payments. According to Jean-Claude Paolini, who collaborated with receiver Christophe Roumezi on the case, independent investor Stanislas de Ferrières and a group of former Charles Jourdan employees were among the candidates since considered. Groupe Royer’s deal, valued at 2.4 millions euros, or $3.2 million at current exchange, includes French rights for the Charles Jourdan brand, seven stores in France and factory equipment, as well as share options in Charles Jourdan’s Swiss-based subsidiary, Charles Jourdan Holding AG, which owns the brand’s international licensing rights except for in the U.S., according to Anne Royer, Groupe Royer’s director of communication. BBC International, which owns the U.S. rights to the brand, did not return calls seeking comment.

Groupe Royer, which holds footwear licenses for the likes of Converse, Von Dutch, Lee Cooper, Morgan and Paul & Joe Sister, acquired the Kickers and Stephane Kélian brands last year. “We’re delighted with the addition of Charles Jourdan to our portfolio, as our strategy is to develop a luxury pole,” said Royer, adding that, while 85 percent of the group’s production takes place in Asia, the firm is negotiating a partnership with a French producer for the Jourdan brand. “The brand’s collections will hopefully be made in France, if not in Italy or eventually Spain,” said Royer, adding that the first collection is set for spring ’10. Groupe Royer’s most recent annual revenues totaled 260 million euros, or $350 million at current exchange, down almost 5 percent from 2007.


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