Clubmarket Seeks Quick Sale

Evidence from board and executive meetings at troubled Clubmarket is shedding light on what went on in the troubled supermarket chain that it is under temporary court protection from its creditors.

Evidence from board and executive meetings at troubled Clubmarket is shedding light on what went on in the troubled supermarket chain that it is under temporary court protection from its creditors.

Clubmarket never made profits, sources knowlegable about the meetings report. The one who managed things at the chain was chairman Yossi Rosen, who tried breathing new life into the company, but failed, the sources continued. Neither the directors nor the executives hardly ever saw controlling owner Dedi Borovich, they added, and thus were under the strong impression that Borovich had little to do with managing the company.

The sources were apparently responding to harsh and widespread criticism that has been publicized since Clubmarket filed for court protection two weeks ago. The owners (the Borovich-Mozes families) have been vilified for letting the company collapse under debts of NIS 1.4 billion, mostly owed to suppliers. Osem CEO Dan Propper has led the charge, vowing to pursue the chain's shareholders to have them account for any wrongdoings. In an exclusive interview last week in Haaretz, Propper accused Borovich of not only misleading him over the state of affairs at Clubmarket back in February, at a time when even the company's auditors had refused to sign the company accounts, but also threatening him if he should say anything malicious about the company to the media.

Meanwhile, Clubmarket's court-appointed trustee managers, Shlomo Nass and Gabi Trabelsi, are scouting the field for a buyer who would purchase the chain as a single going concern, said sources close to the chain yesterday. The search for buyers may indeed prove difficult, as antitrust commissioner Dror Strum said last week that he would prefer to see offers come from somewhere other than the two major supermarket rivals, Supersol and Blue Square.

Trabelsi and Nass are expected to publish invitations for offers of purchase for the chain today, after reaching an agreement with Bank Leumi, as representative of the creditors.

All are aware that speed is of the essence as the court protection is guaranteed only until the court hearing on August 17, and as each day passes under this arrangement, the fate of the chain hangs in the balance. With this understanding, the trustee managers are expected to set only 10-21 days for the offers to be submitted.

Supersol moves in

The Supersol chain announced yesterday that last Thursday it had signed a memo of understanding with Meirav Mazon to jointly purchase part of the Zol Po chain of supermarkets.

The Zol Po franchisees - Avraham Moshe Margalit, Aryeh Boim and Yehuda Laniardo - hold three branches of the low-price supermarket chain and 40 percent of the Be'erot Yitzhak branch. The other 12 Zol Po branches are held exclusively by Clubmarket. Any sale of part of the chain would require approval from both Clubmarket - in the current situation, that would be from the trustee managers - and from the Antitrust Authority, which has said that it will make every effort to prevent anything that would harm the chances of Clubmarket being sold as a single going concern.

Margalit meanwhile said yesterday: "We are not for sale."

Though Supersol's takeover of part of Zol Po would help the former in its penetration of the ultra-Orthodox retail sector, the planned purchase looks beset by obstacles. Clubmarket's managers said that they would have preferred not to have seen such attempts, which "could cause harm to the [Clubmarket] chain's recovery and for the thousands of its creditors."

Since Clubmarket filed for court protection, Zol Po's three franchise-holders have tried distancing themselves from the troubled chain. In their four branches, they have decided not to honor credit cards, and they have opened a separate credit account for their branches.