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An Audacious Project, and Its Founder, Slide Toward Failure in Paris La Jeune Rue Project, and Its Founder, Slide Toward Failure in Paris
(about 9 hours later)
PARIS — It was supposed to become the hot new destination in Paris: an epicurean village in one of the city’s trendiest districts, run by a team of international designers and chefs offering upscale, ethical cuisine in an ultrachic setting.PARIS — It was supposed to become the hot new destination in Paris: an epicurean village in one of the city’s trendiest districts, run by a team of international designers and chefs offering upscale, ethical cuisine in an ultrachic setting.
But more than a year after it was announced, the ambitious concept, called “La Jeune Rue,” or Young Street, appears to be foundering amid backbiting and accusations of mismanagement among its main partners.But more than a year after it was announced, the ambitious concept, called “La Jeune Rue,” or Young Street, appears to be foundering amid backbiting and accusations of mismanagement among its main partners.
Along three quiet streets in the north of the Marais district, a dozen storefronts that were designated to become artisanal cheese shops, organic bakeries and stylized restaurants lie shuttered and empty. Bankruptcy proceedings have been started for the project’s management companies. Suppliers say they have not been paid.Along three quiet streets in the north of the Marais district, a dozen storefronts that were designated to become artisanal cheese shops, organic bakeries and stylized restaurants lie shuttered and empty. Bankruptcy proceedings have been started for the project’s management companies. Suppliers say they have not been paid.
The cloud over the plan — what amounted to a bold effort to gentrify an entire neighborhood in one throw — has now added to the intrigue surrounding its founder, Cédric Naudon, a self-described magnate with a taste for luxury.The cloud over the plan — what amounted to a bold effort to gentrify an entire neighborhood in one throw — has now added to the intrigue surrounding its founder, Cédric Naudon, a self-described magnate with a taste for luxury.
Largely unknown on the Paris scene before announcing his vision last year, Mr. Naudon used his bohemian-chic image and a magnetic personality to persuade the cream of Parisian society — an array of chefs, architects and designers, as well as politicians and bankers — to back his ambitions. The Paris mayor, Anne Hidalgo, visited the area with fanfare last year, embracing La Jeune Rue as an innovation in urban development and touting the creation of up to 200 jobs.Largely unknown on the Paris scene before announcing his vision last year, Mr. Naudon used his bohemian-chic image and a magnetic personality to persuade the cream of Parisian society — an array of chefs, architects and designers, as well as politicians and bankers — to back his ambitions. The Paris mayor, Anne Hidalgo, visited the area with fanfare last year, embracing La Jeune Rue as an innovation in urban development and touting the creation of up to 200 jobs.
While any big project can run into hurdles, a number of former employees are now asking whether Mr. Naudon has been peddling a dream that was too good to be true.While any big project can run into hurdles, a number of former employees are now asking whether Mr. Naudon has been peddling a dream that was too good to be true.
“Everyone was so proud of the project,” said Michel Duval, who said he had quit his longtime job at Publicis, a large French public relations company, to join what had seemed like a dream team as La Jeune Rue’s purchasing manager. He represented a group of former employees who said they had not received salaries since last autumn and is helping others within the Jeune Rue group who also have not been paid.“Everyone was so proud of the project,” said Michel Duval, who said he had quit his longtime job at Publicis, a large French public relations company, to join what had seemed like a dream team as La Jeune Rue’s purchasing manager. He represented a group of former employees who said they had not received salaries since last autumn and is helping others within the Jeune Rue group who also have not been paid.
Mr. Naudon did not respond to repeated requests for an interview. But early last month, after a journalist approached him on the Rue du Vertbois, an artery of the project, he denied allegations of mismanagement and claims that employees and suppliers had gone unpaid. La Jeune Rue “was not moving as fast as we thought it would,” he said, but was “still continuing.”Mr. Naudon did not respond to repeated requests for an interview. But early last month, after a journalist approached him on the Rue du Vertbois, an artery of the project, he denied allegations of mismanagement and claims that employees and suppliers had gone unpaid. La Jeune Rue “was not moving as fast as we thought it would,” he said, but was “still continuing.”
“I have new investors already,” he said, declining to provide details.“I have new investors already,” he said, declining to provide details.
Mr. Naudon has taken pains to cultivate an air of wealth, appearing in a chauffeured black Maserati and habitually wearing a flowing scarf and a Rolex. French newspapers have pondered who he is and how he made his fortune. Yet he has declined to say much about his finances or background.Mr. Naudon has taken pains to cultivate an air of wealth, appearing in a chauffeured black Maserati and habitually wearing a flowing scarf and a Rolex. French newspapers have pondered who he is and how he made his fortune. Yet he has declined to say much about his finances or background.
In an interview with The New York Times last year, he demurred when asked to clarify conflicting accounts about his education. He declined to answer questions about financial matters, including the costs of the Jeune Rue project. He would say only that he had made large sums in American real estate, and that he wanted to invest in his passion for gastronomy.In an interview with The New York Times last year, he demurred when asked to clarify conflicting accounts about his education. He declined to answer questions about financial matters, including the costs of the Jeune Rue project. He would say only that he had made large sums in American real estate, and that he wanted to invest in his passion for gastronomy.
With others, he was more loquacious. Pierre Aidenbaum, mayor of the Third Arrondissement, where La Jeune Rue was located, described Mr. Naudon as a “beau parleur,” the French equivalent of a smooth talker.With others, he was more loquacious. Pierre Aidenbaum, mayor of the Third Arrondissement, where La Jeune Rue was located, described Mr. Naudon as a “beau parleur,” the French equivalent of a smooth talker.
Mr. Naudon had earlier invested in Le Sergent Recruteur, a restaurant that was awarded a Michelin star. On the strength of that asset, several French banks agreed to provide funding to complement Mr. Naudon’s investment, which he would not disclose. France’s state-backed public investment bank also pledged partial support.Mr. Naudon had earlier invested in Le Sergent Recruteur, a restaurant that was awarded a Michelin star. On the strength of that asset, several French banks agreed to provide funding to complement Mr. Naudon’s investment, which he would not disclose. France’s state-backed public investment bank also pledged partial support.
Mr. Naudon refurbished one high-end restaurant on La Jeune Rue and opened two others. But as construction of the other boutiques got underway last spring, things apparently began to veer off course.Mr. Naudon refurbished one high-end restaurant on La Jeune Rue and opened two others. But as construction of the other boutiques got underway last spring, things apparently began to veer off course.
In interviews, chefs, architects and other former employees who had helped oversee La Jeune Rue said they believed that Mr. Naudon’s ambitions overstretched his financing.In interviews, chefs, architects and other former employees who had helped oversee La Jeune Rue said they believed that Mr. Naudon’s ambitions overstretched his financing.
By the autumn, these people said, the project was stumbling: None of the new boutiques had opened. Many of the more than 130 employees engaged to run La Jeune Rue reported delays in receiving their paychecks.By the autumn, these people said, the project was stumbling: None of the new boutiques had opened. Many of the more than 130 employees engaged to run La Jeune Rue reported delays in receiving their paychecks.
In October, the French state investment bank, after conducting inquiries, announced that it was withdrawing its support. The commercial banks also declined to provide further financing, according to a judicial source with knowledge of the proceedings, who was not authorized to speak publicly.In October, the French state investment bank, after conducting inquiries, announced that it was withdrawing its support. The commercial banks also declined to provide further financing, according to a judicial source with knowledge of the proceedings, who was not authorized to speak publicly.
Twelve of Mr. Naudon’s companies have now filed for bankruptcy, and all twelve are in liquidation, including Le Sergent Recruteur and another restaurant, Le Pan, the judicial source said. Thirteen other companies are going into liquidation in the coming days, the source said.Twelve of Mr. Naudon’s companies have now filed for bankruptcy, and all twelve are in liquidation, including Le Sergent Recruteur and another restaurant, Le Pan, the judicial source said. Thirteen other companies are going into liquidation in the coming days, the source said.
As of May, it appeared that most of the 130 people working on the project had resigned or been fired, several former employees said.As of May, it appeared that most of the 130 people working on the project had resigned or been fired, several former employees said.
Johann Berger, a French architect who was in charge of construction, said he was asked to spare no expense in the design and execution of at least 10 stores and restaurants and to aim for opening all 36 stores as quickly as possible. Mr. Berger estimated the cost at 30 million euros, about $33.3 million, an amount he said he believed was more than Mr. Naudon could afford without investors.Johann Berger, a French architect who was in charge of construction, said he was asked to spare no expense in the design and execution of at least 10 stores and restaurants and to aim for opening all 36 stores as quickly as possible. Mr. Berger estimated the cost at 30 million euros, about $33.3 million, an amount he said he believed was more than Mr. Naudon could afford without investors.
“He said, ‘No problem, I have money,’” Mr. Berger said of Mr. Naudon. “He explained he was a multimillionaire, that he made his fortune in real estate in the United States. It was all very reassuring.”“He said, ‘No problem, I have money,’” Mr. Berger said of Mr. Naudon. “He explained he was a multimillionaire, that he made his fortune in real estate in the United States. It was all very reassuring.”
So was his first meeting with Mr. Naudon, whom he had not encountered before the project, he said. “He arrived in a Ferrari, which it turns out was rented, wearing Berluti shoes and a Dior suit. He had lawyers. We put confidence in him.”So was his first meeting with Mr. Naudon, whom he had not encountered before the project, he said. “He arrived in a Ferrari, which it turns out was rented, wearing Berluti shoes and a Dior suit. He had lawyers. We put confidence in him.”
Last summer, Mr. Berger said, Mr. Naudon asked him for a €230,000 loan to pay salaries.Last summer, Mr. Berger said, Mr. Naudon asked him for a €230,000 loan to pay salaries.
When workers again reported they were not being paid, Mr. Berger said that he halted construction. Today, he said, Mr. Naudon owes him €400,000 for unpaid bills and the loan, which he said had not been reimbursed.When workers again reported they were not being paid, Mr. Berger said that he halted construction. Today, he said, Mr. Naudon owes him €400,000 for unpaid bills and the loan, which he said had not been reimbursed.
Nicolas Kenedi, the president of Item, a firm overseeing communications for La Jeune Rue, which has since pulled out of the project, said Mr. Naudon owed him more than €83,000 in unpaid bills.Nicolas Kenedi, the president of Item, a firm overseeing communications for La Jeune Rue, which has since pulled out of the project, said Mr. Naudon owed him more than €83,000 in unpaid bills.
When encountered on the street and asked about the allegations, Mr. Naudon said that Mr. Berger and former employees had pushed him to expand faster and that they owed him money now that the project has gone off course.When encountered on the street and asked about the allegations, Mr. Naudon said that Mr. Berger and former employees had pushed him to expand faster and that they owed him money now that the project has gone off course.
In addition, Mr. Naudon said he had cut ties with the French investment bank because of stiff terms. He threatened to sue journalists writing about the project’s troubles.In addition, Mr. Naudon said he had cut ties with the French investment bank because of stiff terms. He threatened to sue journalists writing about the project’s troubles.
Antonin Bonnet, the head chef at Mr. Naudon’s prior investment, Le Sergent Recruteur, had become one of the chief architects of the Jeune Rue project. He recently resigned.Antonin Bonnet, the head chef at Mr. Naudon’s prior investment, Le Sergent Recruteur, had become one of the chief architects of the Jeune Rue project. He recently resigned.
As the partners expressed concern about financing, he said, Mr. Naudon would talk them off the cliff. “He just washed your brain,” Mr. Bonnet said. “That was his genius: he could sell you anything.”As the partners expressed concern about financing, he said, Mr. Naudon would talk them off the cliff. “He just washed your brain,” Mr. Bonnet said. “That was his genius: he could sell you anything.”
Some investors are already picking through the wreckage. A start-up called HopShop, a platform for booking pop-up stores, recently began a public campaign to raise €28,000 to open 10 temporary boutiques for artisans and artists where La Jeune Rue was supposed to be. They are not dealing with Mr. Naudon. If they raise the money, the stores will operate for only two weeks.Some investors are already picking through the wreckage. A start-up called HopShop, a platform for booking pop-up stores, recently began a public campaign to raise €28,000 to open 10 temporary boutiques for artisans and artists where La Jeune Rue was supposed to be. They are not dealing with Mr. Naudon. If they raise the money, the stores will operate for only two weeks.
That is of little comfort to Mr. Duval, the former purchasing manager. While he and other employees have finally received back wages — not from Mr. Naudon, but from a fund run by the French state — the greater challenge for him and his former colleagues has been the moral blow of seeing La Jeune Rue suffocate.That is of little comfort to Mr. Duval, the former purchasing manager. While he and other employees have finally received back wages — not from Mr. Naudon, but from a fund run by the French state — the greater challenge for him and his former colleagues has been the moral blow of seeing La Jeune Rue suffocate.
“We wanted to believe Naudon,” he said. “He made everyone dream.”“We wanted to believe Naudon,” he said. “He made everyone dream.”