The family behind Jumbo wants to make HEMA a Dutch company...

Strong capital, stable and also very interested. If one company could save department store chain HEMA from shrewd investors, it would be supermarket group Ahold. In 2007 the parent company of Albert Heijn, drugstore chain Etos and liquor store Gall & Gall already showed serious interest. With a new takeover attempt, four years later, Ahold was already almost in control of the keys to HEMA. The last financial details went wrong.

So when HEMA (€ 1.3 billion turnover, 11,600 employees) came into the hands of its creditors this summer and started looking for a suitable buyer, Ahold was quickly looked to. There was interest again. But no offer was made.

Four months later, it is not Ahold, but the Van Eerd family who appears to be piloting HEMA to a safe haven. That is the family behind Jumbo, which has grown into Ahold’s largest Dutch competitor in recent years.

The Jumbo owners, for example, once again trump Albert Heijn. Last year, Albert Heijn was to conduct a pilot with HEMA, in which some HEMA stores began to sell the market leader’s range. This was canceled – and shortly afterwards HEMA announced a collaboration with Jumbo. HEMA became co-sponsor of Jumbo-Visma’s cycling and skating team and Jumbo started selling HEMA products such as pans and tea towels in all seven hundred stores.

That hurt in Zaandam, where Ahold is located. Just as it had already hurt how the supermarket company from Veghel grew into a superpower through acquisitions of Super de Boer and C1000 (turnover: 8.7 billion euros, almost 100,000 employees). But for Ahold it is even more painful now that the Van Eerd family is the last to remain in the battle for HEMA. Father familias Karel, son Frits and daughters Colette and Monique are the only four shareholders of Jumbo. With private capital they want to take over HEMA together with the Dutch investment company Parcom. The parties are expected to announce next week that they will be negotiating “exclusively” for eight weeks. The British investment company that was also interested, Alteri, has now officially dropped out.

‘Exclusive negotiations’ or not, there is still a lot of uncertainty. Only in the next two months will the occasional duo Parcom-Van Eerd do in-depth book research. Bank financing has not yet been completed either. Parcom and the Van Eerd family are each willing to invest 75 million euros, they are asking another 300 million euros from the banks. The idea is to work with a consortium of Rabobank, ING and ABN Amro – HEMA is considered Dutch heritage and Dutch shareholders and financiers must be behind that, they think at Parcom and Van Eerd.

Not one owner, but an entire club

The takeover process is very complicated and dragging on, say insiders. That’s because HEMA fell into the hands of its creditors last summer, led by the Ad Hoc Group, a club of eight foreign debt funds. Less than two years earlier, entrepreneur Marcel Boekhoorn had bought HEMA, with the idea of ​​saving the wasted heritage. That went wrong because of the enormous debt from the past that the retail chain still carried with it.

When HEMA had to pay off a debt of 50 million in mid-June, it could not pay it – and Boekhoorn did not want it. He hoped to negotiate a debt rescheduling arrangement with the creditors. But they had a completely different plan. They demanded the collateral on their loans and thus gained control over HEMA. Now they are trying to sell the stores themselves. They are assisted in this by investment bank Moelis.

Also read this article in NRC about the mysterious parties who now own HEMA

The debt of HEMA has been halved by the new owners from 600 million euros to 300 million, but the interest has increased: from 6.25 to 7.5 percent. In addition, the department store chain has a bank loan of 80 million euros and some of the new owners have made a loan of 42 million euros available to HEMA, at 10 percent interest. In recent years, HEMA has paid around 50 million euros in interest annually, which has been reduced to 28 million euros due to debt restructuring from Monday.

Former HEMA owner Marcel Boekhoorn would be ‘in the sidecar’ with this takeover, but Parcom and Van Eerd appear to continue without him

Shortly after their seizure of power, sources around the Ad Hoc Group already stressed that the new owners would not just look at the proceeds. They also wanted a buyer who saw a future in HEMA. Alteri’s reputation has weighed in their choice, say insiders. The British investor bought Intertoys in 2017, but had that toy retailer collapse barely a year later – only to make tens of millions from the bankruptcy.

Perhaps an even more important argument for choosing Parcom and the Van Eerd family was the structure of Alteri’s offer. The British firm wanted to invest as little of its own money as possible and asked the current owners to keep their 300 million in loans. In the Dutch proposal, the debts will be paid off, which is less risky for the sellers. They will be rid of HEMA in one fell swoop, but will have to settle for a lower yield than hoped for.

New start, without Boekhoorn

Initially, reports appeared in the media that Marcel Boekhoorn was “in the sidecar” at Parcom and Van Eerd. He wanted to restore his damaged reputation. Now multiple sources confirm that Parcom and Van Eerd will continue without him. The two would like to make a new start with HEMA, and that does not work with Boekhoorn’s history. Banks would also have had doubts about the involvement of the former HEMA owner. A partner of Boekhoorn’s investment company Ramphastos did not want to respond to questions about this.

Also read this reconstruction of the takeover of Hema by Boekhoorn: No one saw Hema’s rescue coming

Parcom (1.5 billion euros in assets under management) and Van Eerd want to get rid of the foreign debt traders and the “Anglo-Saxon conditions”, sources say. They only dare to take on the adventure if the Dutch banks participate, and without those sky-high interest charges. The new HEMA in their vision: Dutch shareholders with a long-term perspective plus a solid financing structure. That is to say: interest rates of 3 to 3.5 percent, so that the annual interest burden is between 10 and 12 million euros. This provides breathing space, so that HEMA can reinvest the money it earns in the stores.

Parcom and Van Eerd also want to go back to basics. HEMA should again focus on the Dutch, Belgian and French markets. And on the online sales. That is a very different course from the strategy that Boekhoorn and the British investor Lion Capital have followed in recent years. On the contrary, they wanted to develop HEMA into an ‘international brand’ and opened stores in Mexico, Abu Dhabi and Canada through franchise constructions.

Jiskoot is a supervisory director at HEMA and Jumbo

Parcom is a Dutch investment company led by Gijs Vuursteen and Bas Becks. They both come from private equity firm CVC. In his CVC past, Becks did business with Jumbo on the acquisition of C1000. Since then, the Parcom men and financial top man Ton van Veen of Jumbo have had a good relationship. Parcom’s financiers include CVC founder Rolly van Rappard and Robert van der Wallen, who made a fortune selling his company BrandLoyalty. BrandLoyalty and Jumbo know each other from the sponsorship of the cycling and skating team. Former ABN Amro banker Wilco Jiskoot is both chairman of the supervisory board at HEMA and at Jumbo.

The interest from the Van Eerd family did not come out of the blue. The Jumbo owners think HEMA is a great brand, which, like Jumbo, focuses on a wide audience. Colette van Eerd has a history with the retail chain: she started her career as a trainee in the nineties and left a few years later as manager logistics and purchasing.

Jumbo CEO Frits van Eerd said in an interview this spring de Volkskrant about the collaboration: “Deep in my heart I would rather have bought all of HEMA. I have often watched that, but that is too much of a far-from-our-bed show. ”

Also read this profile of the Van Eerd family from 2016, when Jumbo surprised with the acquisition of La Place

Financially, Parcom and Van Eerd do not need each other, but the parties both see advantages of working together. Parcom can rely on the synergy that already exists between HEMA and Jumbo and on the family’s knowledge of the retail sector. Also from the Van Eerd family’s view, the collaboration with Parcom is a smart move. At the moment, a takeover of HEMA by their company would distract too much from the growth that Jumbo is experiencing. That is why it will remain a private investment of the family for the time being. In five to seven years, if HEMA is in better shape again, Jumbo could still take its chance. By buying out Parcom and eventually incorporating HEMA itself. Because that’s what the Van Eerd family wants, deep in their heart.