In the form of two royal families marrying their children together for power, Dutch department store chain HEMA is reported likely to join the Dutch supermarket chain Jumbo’s family.
HEMA has been struggling financially with creditors and has recently stared down the barrel of bankruptcy. Now, a preliminary agreement has been reached at the eleventh hour between the owners and the Van Eerd family, who own Jumbo and Dutch investor Parcom.
The deal is not set in stone yet. The Van Eerd family will inspect the department store more fully in the coming weeks, and enter discussions with banks to the tune of the required €300 million.
All for one, and one for all?
We sadly won’t be seeing a JUMA or a HEMBO anytime soon. The Van Eerd family has emphasized that the two brands will be kept separate.
Instead, HEMA will be purchased under a new investment vehicle named Mississippi Ventures. The name comes from a place where the family got their inspiration to embrace “customer thinking”. Of course, we’re not sure if naming a Dutch brand after a US state is good luck.
Interestingly, it’s not the Van Eerd’s family’s first time rubbing shoulders with HEMA. Jumbo and HEMA created a separate partnership already last year.
Switching focus from international markets
Despite recent expansions into foreign markets, HEMA will turn its attention back inwards. Recent years have seen HEMA stores open in Qatar, the UAE, and Mexico. However, the new owners are feeling less internationally minded.
“HEMA obtains 90 percent of its turnover from the Netherlands, Belgium and France”, says Ton van Veen, spokesperson on behalf of the Van Eerd family, and top financial man at Jumbo, to NOS. “If you have year-on-year sales declines in those countries, you are not going to solve them with adventures in Qatar and the United Arab Emirates. That is not to say that we are going to stop that immediately, but the priority is to grow the HEMA brand in home markets.”
What happened to HEMA?
The brand known for savings has conversely become encumbered with enormous debt in recent years — it hasn’t recorded a profit since 2012. The company’s debt was already negotiated down from €750 million to €300 million.
The prior owner, Marcel Boekhoorn, lost the group last summer. He failed to meet payment obligations, creating a conflict with the creditors. The creditors have been looking for a purchaser for the department store ever since. Under the new deal, the creditors will receive around €440 million.
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Feature Image: Donald Trung/Wikimedia/CC4.0 & Jumbo
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