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Is it possible to mistake Taster's Choice, the world's best-known brand of coffee, with a toaster - a simple electric appliance used to toast bread or warm things up?

Plain logic would say that such a mix-up is quite unlikely: The words don't even sound alike and there is no direct - or indirect - link between the two. One is a consumable foodstuff and the other is an electric appliance.

Dedi Borovich claims that he couldn't tell the difference. Last week he told us that when Dan Propper approached him and complained that Clubmarket was selling Taster's Choice imported directly from Brazil - bypassing Osem, the coffee's official importer - Borovich said he was sure Propper was talking about toasters.

"I called Clubmarket's management and requested that they make sure that they were not selling toasters, since Osem considered that to be a blow below the belt, and I informed Propper that he could view the whole affair as closed," Borovich said.

"After a few days they called from Osem and told me that we were not keeping our agreements and were continuing to sell Taster's Choice - and only then, after I checked out the story, did I understand it was about coffee," said Borovich.

Does this sound like a fantasy? Is it possible that Dedi Borovich, one of the owners of the third-largest supermarket chain in Israel up until only three weeks ago, had never heard the name of the best-selling brand of coffee in Israel and did not understand that Dan Propper, one of his largest suppliers, had no interest in toasters?

This story will not surprise anyone who knows Dedi Borovich. He is quite a strange bird, with a strange lifestyle and a different view of the business world. But even someone who doesn't believe the story can understand that Dedi Borovich, the owner of Clubmarket, never claimed and still doesn't claim to know anything about retailing and food sales.

The business sector's attack on the Borovich family as a result of the Clubmarket collapse, including the demands to investigate the company's management and to consider "lifting the curtain" by making claims on the family's private assets, is viewed as a watershed in Israeli business ethics.

This is something along the lines of "We're disgusted by the rich," an echo of the cries against the corruption in politics.

But is Clubmarket really such a special case, a real fault line in Israeli business, an exceptional occurrence of the rich stealing from the public? Far from it.

Clubmarket is likely to be one of the most painful and important failures in the Israeli economy in recent years. Closing down the chain will probably lead to thousands of firings, and incredible damage to hundreds of suppliers and their employees; but no less important, it will probably lead to higher prices in the retail markets if the chain, or its stores, are snapped up or destroyed by its two large rivals, Supersol and Blue Square.

But it is worth delving deeper into the chain's history and figures. Examining the complete reports, published for the first time last week in Haaretz, shows that the day the Boroviches gave up and asked for court protection from their creditors, their total debts to the banks and suppliers was NIS 1.28 billion. Compare this to debts of NIS 1.2 billion on the day they bought the supermarket at the end of 2001.

The financials also show that the firm had negative equity of NIS 224 million when it was purchased, and it further accumulated losses of NIS 197 million in 2001 and 2002.

In other words, the Clubmarket chain was a failing business, risky and over-leveraged a long time before the Boroviches bought it. The timing of the purchase was of course particularly bad - just before retail margins collapsed and the economic crisis grew much worse - so the Boroviches' failure to rehabilitate the company should have come as no surprise at all.

But wait a minute - if the business was so risky, why did Bank Leumi agree to give the Borovich family $75 million in credit to buy the supermarkets without any recourse or claim on the borrowers themselves? Didn't Leumi understand the dangers?

They knew very well, but they had no choice. Like a lot of other companies in Israel in 2001, Clubmarket was already a hot potato for the banks - a business that managed to get a huge amount of bank credit during the previous good economic times - and the chances that Clubmarket would pay back its debts were slim.

But the banks are no different than their borrowers, they hate to admit their mistakes, and if it is possible to roll over debts, or sweep them under the carpet and hope for better days, then the banks are the first in line to buy the deal.

Eliezer Fishman and Co-Op Tzafon's sale of Clubmarket to the Borovich family was a wonderful chance for the banks to postpone the company's collapse, and left a glimmer of hope that they might succeed in fixing the business, or at least finding investors.

However, all these great expectations failed. Market competition only increased, and no one could find an investor willing to put money into the chain. They couldn't find a real leader to manage the business, and Dedi Borovich, as we have already explained, can't tell coffee from toasters.

The suppliers and banks did not increase their exposure to Clubmarket in recent years; if the chain had collapsed four years ago, the damage would not have been very different.

So why the incredible anger at the Boroviches? The answer is simple: They refused to acknowledge the truth and acted arrogantly. They continued to sell everyone their image as geniuses who know how to manage airlines, leasing, food retailers, fuel and even newspapers. Clubmarket could not fall, since it belonged to the Boroviches.

And then one morning they changed their story. Instead of successful businessmen who rehabilitate companies with wonderful synergies as part of their family business enterprises, they started to sell themselves as the victim: Businessmen who bought a failing business expensively, who brought inappropriate managers, and they themselves know nothing about retailing - even telling the difference between coffee and toasters.

So why did the business sector wake up over the Boroviches? For years there have been no lack of failures. But in previous failures most of the burden fell on the banks, and they only wanted to silence the affairs in order not to expose their own mistakes. This time, among the long list of victims are most of the country's biggest businessmen.

Usually there is a different arrangement for these firms. These failing companies usually raise funds from the public by issuing stock or bonds. Then the share price falls and the bonds collapse, but the company has the cash to keep on breathing. The investing public is, of course, ignored in such cases. They don't have Dan Propper or other big shots to speak for them.

And there is also another type of arrangement: When a company does business in a government-regulated market, the owners approach various ministers and ask for various and strange "leniencies." These new conditions, of course, translate directly into higher profit margins for the company, at the cost of higher prices for services and further harm to the consumer.

This is the Boroviches' major problem, and also that of Clubmarket's chairman and CEO: Clubmarket was in a business where there was no minister or regulator who was able to save it. We are talking about the third-biggest chain in the market with no monopoly standing: a frightfully competitive business that wins or loses based only on its management skills.

And when the business is competitive and it is impossible to pass your management mistakes on to the consumer, life is much duller and the managers are not stars, and the owners are not geniuses. All that they can do is sell themselves as the victims on judgment day.