Department store HEMA is in danger of falling into the hands of the British vulture investor Alteri. It earns money from faltering retail chains, even if this is at the expense of tough restructuring and mass layoffs. Such as with the Dutch Intertoys, which went bankrupt under the British.
HEMA is facing exciting months. At the end of last week, the Amsterdam court approved the expropriation of the department store, putting it definitively in the hands of a group of creditors.
Those new owners do not want to run a retail business, but want to resell HEMA as quickly as possible. Two parties are considered the biggest contenders for this: the Dutch Parcom and the British Alteri.
Solid reputation
Parcom is an investor with a track record of decades and a solid reputation. The former private equity firm of ING would consider working with the family behind supermarket giant Jumbo and former HEMA owner Marcel Boekhoorn.
As an investor with strong roots in the Dutch clay, Parcom would suffer considerable reputational damage if it unleashed financial tricks at HEMA that would make it better, but the department store worse.
Store remediator
The second major contender for HEMA, the British Alteri, is a completely different type of investor. The investment fund has existed for barely six years and is not embedded in Dutch business.
Alteri was founded at the end of 2014 by Gavin George, a British ex-accountant who earned his spurs at retailer GA Europe. Investments in the Benelux have been under the care of Arnold Vos, trained in Delft since 2016.
Their fund is funded by the controversial Apollo, the US private equity giant with assets under management of more than $ 300 billion. The private assets of Apollo CEO Leon Black, described by Bloomberg as ‘ruthless’, is estimated at $ 9.3 billion.
Alteri, which claims to have an investment horizon of only 3 to 5 years, presents itself as a specialist in making ailing retail businesses healthy. The practice is sometimes different.
Thousands of jobs away
In recent years, it turned out that Alteri often buys retail chains with a spot in order to squeeze money out of it left or right. In addition, the investor does not shrink from rigorous restructuring, moratoriums, bankruptcies or mass layoffs.
In 2015 and 2016, Alteri invested in the British retail chains Brantano UK, Jones Bootmaker and Austin Reed. In those three chains, 3,700 jobs disappeared within two years, RTL Z calculated earlier.
Intertoys
That dubious reputation could not prevent Alteri from striking in the Netherlands. At the end of 2017, the British took over toy chain Intertoys from the faltering Blokker Holding.
At the time, Intertoys was still a gigantic company with 500 stores, including more than 100 franchise stores. The own stores and the two distribution centers alone employed more than 4000 people.
Shiny future
The Intertoys acquisition was sold as a fantastic deal. In a press release, the top executives of Blokker and Alteri were short of saliva to sketch the shiny future of the toy chain.
“Alteri’s involvement and investments will enable Intertoys to further build on the brand, the online capabilities and the store network,” exulted a then Blokker executive. “With the support of Alteri, Intertoys can execute its plans (…) more quickly and effectively.”
Rock-hard bankrupt
But just as with the three British retail chains, things did not end well with Intertoys. Fourteen months after the takeover, Alteri dropped the company hard. The toy giant went bankrupt in February 2019.
Not much later, the trustees’ report showed that Alteri had provided itself with a cast-iron starting position in order to be able to earn a lot from the bankruptcy.
It is remarkable that the trustees Joris Lensink and Jasper Berkenbosch nevertheless expressed a positive opinion about Alteri, partly because the British gave some millions to the bankrupt estate. At the time, the trustees did not want to reveal how much Alteri itself got from the estate.
Lensink and Berkenbosch have not responded to repeated requests in recent days to explain their experiences with Alteri.
Shade
After the bankruptcy, Intertoys was restarted by a vague Portuguese investor, who, however, also failed to keep its beautiful promises. Within six months it sold the remnants of the toy chain back to Blokker Holding.
A shadow remains of Intertoys, with only 200 stores (80 of which are franchises) and 1100 of its own employees. That is about a quarter of the workforce before the takeover by Alteri.
CNV union leader Martijn den Heijer, who was initially enthusiastic about the takeover by Alteri, says afterwards that he remembers little about the British.
“They were only in the picture for a moment. Blink twice, and they were already gone. It is clear that they failed to make Intertoys a thriving company. They did not try their best to keep it going. . ”
Still a contender
At first glance, it may seem unlikely that, following the Intertoys debacle, Alteri will have a serious chance to acquire HEMA with its 19,000 employees (including franchisers and foreign stores).
However, the current owners of HEMA will mainly look at the return they can make when selling the department store. It is therefore quite possible that they are enamored of Alteri’s deep pockets, which the British owe for their links with the American Apollo.
Not excluded
It is remarkable that both the citizens’ initiative ‘Koop de HEMA’ and HEMA itself do not distance themselves outright from Alteri. At most, they show their preference between the lines.
HEMA does not want to answer the question of which buyer it would prefer; Parcom or Alteri. But the department store said in a press release last week that it was looking for an owner with long-term goals together with the creditors.
Hema as an ATM
This also applies to the initiative that raises capital from HEMA fans to become co-owner of the department store. “We know the background of the candidates, but do not exclude anyone from cooperation in advance,” said chair Anna Grebenchtchikova. “However, such a party must commit to our conditions.”
The citizens’ initiative only wants to collaborate with a buyer ‘who strives for a sustainable continuity of HEMA’, it emphasizes on its website. “We cannot work with a party that sees HEMA primarily as an ATM.”
