Clubmarket Deal Faces Last-minute Glitch

In a surprising reversal of fortunes, the trustees running the bankrupt supermarket chain Clubmarket threatened to liquidate the company yesterday.

In a surprising reversal of fortunes, the trustees running the bankrupt supermarket chain Clubmarket threatened to liquidate the company yesterday, following a dispute with Clubmarket's staffers over the takeover. The trustees, Shlomo Nass and Gabi Trabelsi, said they were prepared to file papers with the courts for the company's liquidation, which would mean the loss of all 3,500 jobs.

Union representatives announced their opposition to the chain's sale to Supersol - a deal that had been approved this week by both the court and the Antitrust Authority - in particular due to the contingent closure of several stores and the loss of jobs. Talks between the trustees and the workers continued late yesterday, though one Histadrut labor federation representative expressed optimism over settling the final matters of dispute "within a few hours."

The workers' opposition, announced by Histadrut representative Yoram Orenstein, had taken Clubmarket's court-appointed trustees by surprise, say sources connected to the talks. The trustees had met with the labor representatives Tuesday and signed an agreement ahead of selling Clubmarket to Supersol.

Orenstein, who heads the Histadrut's marketing division, says the workers do not oppose the sale to Supersol, but merely a few points regarding working relations.

The concessions the workers already made include all their assets, Orenstein protested: "We agreed to a period of industrial calm lasting more than two years. We agreed to forego negotiations over closing down branches, and now there are a few marginal issues that Supersol is insisting upon, to which we cannot accede." Originally, Supersol had insisted on a period of three years of industrial quiet after the sale, while the workers had initially agreed to two. The parties finally settled on two and a half years without strikes.

Another sore point between the parties involves the closure of stores above and beyond the 17 that Antitrust Commissioner Dror Strum had conditioned on approval of the deal, which would form a retail chain commanding 37 percent of the market.

A further disagreement centered on the Histadrut's demand that Clubmarket's workers' committee remain independent of Supersol's. It seems that the parties will maintain the present arrangement but only until the full merger of the two companies is complete.

Industry sources shrug that the Histadrut's opposition is merely a tactic to wrest a few concessions out of Supersol.

Supersol workers themselves were not amused by yesterday's shenanigans. "Supersol workers have lost all faith in the Histadrut," head of the chain's workers' committee, Ariela Sisso, wrote to Histadrut chairman MK Amir Peretz. Sisso contended that the labor federation was clearly more concerned about the personal future of the Clubmarket union head - Albert Ashur - "at the expense of the future of thousands of Clubmarket and Supersol workers."

She further accused the Histadrut of pushing for separate workers' representatives from the two staffs, rather than rely on Supersol's existing organization, "in order to split the worker organization's powers, which would impact their rights and united front - and all to serve ulterior motives as opposed to the good of the workers."

Formal approval

Strum approved Clubmarket's sale to Supersol, contingent on the sale of Clubmarket outlets that are close to Supersol stores, and limitations on loss-leaders (items sold below cost to attract buyers to the stores).

He issued his formal approval yesterday, and in so doing reiterated clearly that any abuse of Supersol's commanding position in wreaking lower prices from suppliers would constitute a criminal offense. Some of the restrictions that Strum published yesterday on the new super-supermarket chain were also designed to protect the consumer public: The company will be forbidden from making demands of its suppliers, or refusing to buy products from its suppliers, or conditioning contracts on other demands, such as refusing to supply products to competitor stores, refusing to offer similar offers or to match the terms to rival stores, or offering better terms to rival stores.

Strum also made clear to Nass and Trabelsi yesterday that unless he sees they have appointed a trustee to oversee the sale of the 17 Clubmarket stores - one of the major provisos he set for the deal - then he will remove his approval for the takeover.

The trustees responded that the matter of the branches' sale is in their remit, and not his, according to the court that appointed them to administer the company during its period of protection from its creditors. They added that they would be willing to work with Strum on the matter. Apparently, Supersol will reduce its offer for the company by some NIS 69 million as a result of the stipulation that 17 of the branches must be sold. The trustees believe that they could sell the 17 stores for NIS 40-50 million. Yesterday Co-Op Jerusalem expressed an interest in buying Clubmarket's outlets in Beit Shemesh. CEO Rami Mendel said it was examining the situation vis-a-vis the real estate.