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Efforts to rehabilitate the Clubmarket supermarket chain received a blow yesterday, when the idea of appointing Yoram Dar as the chain's CEO while it is in receivership was nixed by Dar's former employer, the Blue Square supermarket chain.

Dar had previously served as CEO of Blue Square, and his contract forbids him to accept a job with a rival chain during a cooling-off period that will end only in another five months. Therefore, his appointment would only have been possible had Blue Square agreed to waive this restriction. Yesterday, however, Blue Square's chairman, David Weissman, definitively refused to do so.

Dar had been the favored choice not only of Clubmarket's trustees, accountant Gabriel Trabelsi and attorney Shlomo Ness, but also of the banks and of many Clubmarket suppliers. All of these groups had urged Weissman to relent, but to no avail.

Industry executives explained that having the chain led by a top retailing expert is crucial at this time, because if it is to be sold successfully, it must be overhauled. To survive, they said, Clubmarket requires major changes, such as the closure of loss-making stores and new agreements with workers and landlords. However, these changes would be difficult for a new owner to make, because once the chain is sold, the threat of imminent closure will disappear, so its interlocutors will no longer have the same incentive to make concessions.

Therefore, the executives said, the changes must be made now if Clubmarket is ever to be attractive to buyers. However, a retailing expert is needed to make wise decisions on these issues, and neither Trabelsi nor Ness has the necessary expertise.

Alongside the bad news, there was also a promising development yesterday: Significant progress was made toward a deal that would allow Clubmarket's small suppliers to resume providing it with goods. Under the emerging deal, Clubmarket would pay part of the price immediately upon receiving the goods and the rest within 30 days.

The small suppliers are willing to accept this in principle, but want the banks to serve as the chain's guarantor for the 30-day loans to ensure that they will be repaid even if Clubmarket's funds run out. Otherwise, they fear that continuing to supply the chain would simply cause their losses to balloon should it eventually go under.

Currently, only some 30 percent of Clubmarket's suppliers still deliver to it, but since these are the largest suppliers, the chain is still receiving about 80 percent of its normal inventory. The large suppliers are being paid within a week of delivery, but the small suppliers lack the clout to obtain a similar deal.

Meanwhile, Clubmarket's collapse is continuing to exert a ripple effect on the economy. Two major suppliers, Osem and Tnuva, have responded by cutting credit to small grocery stores - though not to other major chains. Both companies used to require payment only 70 days after delivery. But Tnuva is now demanding that small stores pay within 50 days, while Osem is demanding payment in 30 days.

And El Al's workers have refused to begin contract negotiations with the airline's new owners until the effect of Clubmarket's collapse on the Boroviches becomes clear. The Boroviches own both El Al and Clubmarket.