Analysis / Punishing the Boroviches
Walking into a Hetzi Kupah supermarket this week was to gore oneself on the horns of a dilemma. The vast space was almost empty of buyers, and some of the shelves of meat and milk products were empty too.
One had the urge to flee the place, in part out of the desire to punish its owners, the Borovich-Mozes-Rosen group, which jumped ship and handed the keys over to the court, abandoning 3,500 workers and thousands of suppliers. If they don't care about saving the chain, why should consumers?
But one look at the unhappy face of the cashier gave room for pause. If we don't buy at Clubmarket or one of its other chains, who gets punished?
Not the Boroviches: They're set for life. They may have lost most of their investment in the chain, though not before saving as much as possible by making the chain repay a shareholders' loan. For them, Clubmarket is history. Nobody believes they'll start pouring their own money into the chain at this point, especially after the torrent of mud that has washed over their heads.
Those who will be punished are that unhappy cashier, the shelf packers, the lady who pounds the schnitzels and a whole bunch of suppliers that supply cheese and spices and pots and pans, whose main source of income had been Clubmarket. Its demise leaves them ruined, and there are thousands of families at stake.
We the customers will also be hurt. Say what you will about Clubmarket's lousy management, its absence of strategy, its bad service or whatever, but the fact is that it increased competition.
How can the harm to the cashiers and deli workers, to the suppliers and customers, be averted?
Shlomo Nass, one of the two court-appointed trustees running Clubmarket, recommends customers keep buying at the chain to keep it alive and sustain competition.
But even if one wants to show solidarity with the workers and suppliers, and keep Clubmarket alive so competition survives too, one has to suspect the main beneficiaries will be the Clubmarket owners. Nobody is in a mood to help them these days.
The banks are consolidating a plan to lend Clubmarket another NIS 100 million. The banks are not worried about the Boroviches' fate; they're worried about the NIS 500 million the chain already owes them. Clubmarket owes another NIS 870 million to suppliers, by the way.
Which leads to another issue: The banks have done the math and concluded that a lot of suppliers are going to collapse in the wake of Clubmarket. Saving the chain will rescue many of them and pave the way for Clubmarket to be sold, at least in part.
The banks cannot abandon the chain because it means writing off its debts, and those of many a supplier as well. Leumi would be especially hard hit because it has been the main bank financing the chain.
If the banks crowd round to keep Clubmarket afloat, and consumers decide its survival is in their best interest, again one has to wonder - how can the Boroviches be punished? Yaki Yerushalmi suggests boycotting their other businesses, including El Al. That also would wind up hurting employees and suppliers as well.
At this stage, all that remains is the mark of Cain on the Borovich clan's brow, and the chorus of disgust emanating from the business sector. That is punishment too.
But then, the public's memory is short and the anger at the Boroviches will dissipate as soon as the next scandal raises its smelly head.