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Those giants always look strong, stable and invulnerable. That's why it was such a big surprise when the third-largest supermarket chain in the country - Clubmarket - suddenly collapsed.

Customers arriving at the chain's large and attractive Jumbo store at the Glilot Junction usually saw a crowded store with ringing cash registers. So how did it happen? And how is it possible that it happened to experienced businessmen like the Borovich brothers (El Al), Tami Mozes and Yossi Rosen?

Clubmarket was established on the ruins of Co-op Tzafon - and that was its basic problem. Co-op Tzafon was an old-fashioned chain with branches north of Hadera, in places where the population has little purchasing power. In addition, the chain had a Histadrut labor federation mentality, in other words, poor and inconsiderate service.

There were years when all this didn't cause much damage, because the competition from other chain stores was minimal. Therefore, the chain could charge high prices and work with a profit margin of 26 percent on the shekel: what it sold for a shekel it bought from the supplier for 74 agorot. These high profits enabled it to spend freely, to invest and to expand. It had attractive offices, a large number of executives, company cars and a culture of large expenditures - suitable for a chain with 2,000 stores, and not one with only 114.

In recent years, the business environment has changed substantially. The intifada led to dismissals and lower wages, and the public began to save on food. Private competitors understood that, and established small marketing chains, which worked on small profit margins of 16 percent to 18 percent. But because their administrative expenses were negligible - without many executives and without luxurious offices - they managed to make a profit and survive.

Clubmarket saw its market sector declining, and in an attempt to bring the customers back, it turned some of the stores into discount sub-chains. The number of customers increased, but the profit margin declined to 22 percent. Such a plan could have succeeded if expenses had decreased accordingly. But that didn't happen. Although CEO Yaakov Ginsburg reduced the number of employees, he did not succeed in sufficiently lowering the overall level of expenditures. And the result was losses.

During the past year and a half, the chain's directors the lost their self-confidence. They switched strategies and changed names like socks, so the customers did not develop any brand loyalty, and the losses continued to pile up.

Clubmarket forgot the fundamental law of the retail industry: a high sales volume. Because more important than the discount you get from the supplier is the rate of turnover, in other words, how many times a year the store's inventory is replaced - and the rate of turnover at Clubmarket was extremely low.

It is no coincidence that the chain collapsed now of all times, in mid-July. It happened because of Israel's inferior credit system. In the United States, the system is "2 percent or 10 days" - either you pay the supplier in time, and receive a discount of 2 percent, or you pay the full price within 10 days. In Israel, the purchaser has 75 days (!) to pay the supplier, and that is ruinous.

Now, during this period, the chain has paid the price of the illusion created by the Pesach holiday. Sales reached a peak then, and hundreds of millions of shekels entered the coffers. These high sums blinded the executives and the owners, and enabled the investments and the expenditures to continue. But the Day of Judgment arrived, and suppliers had to be paid for the merchandise that was supplied two and a half months ago, and there was not enough money.

That is the sad part of the story: the 3,500 employees who do not know what tomorrow will bring, and the hundreds of small suppliers, with thousands of families behind them. They have supplied merchandise to Clubmarket for years, and now they are liable to fall together with it, if their debt is not paid back.

Again the eternal question arises: How did the excellent bankers from Bank Leumi and Bank Hapoalim give the Borovich family hundreds of millions of shekels in credit without having them sign a personal guarantee? And will we, the general public, pay once again, through the increase in commissions and interest charges in the banks, to cover the major debt cancellation?

Occasionally, when we, the little guys, invest in dollars, shares or bonds and lose, we feel bad. We think that we don't understand enough, and that only they, the big shots, the rich people, the businessmen, know exactly when to enter the stock market and when to pull out - and they always make a profit.

So, it turns out, that's not exactly true. Even the big businessmen occasionally make a mistake - and in a big way. It turns out that they don't know what and when to buy. They don't even know how to choose the appropriate CEO. Their attempt to expand into the retail market will at best end with a loss of NIS 230 million - their investment in Clubmarket to date.