After the sale of toy chain Intertoys failed at the beginning of this year, owner Mirage is now switching to ‘Plan B’ in his search for capital: the sale of household chain Blokker. Mirage has recently written to various parties to see if they were interested, CEO Ynse Stapert said when asked. “There were quite a few reactions to that.”
Stapert thus confirms the news The Financial Times Thursday morning was the first to reveal, based on a document sent to potential buyers. “We are working on the financing of Blokker,” Stapert said by telephone. “We are investigating all options for this, and sale is one of them.”
A month ago, the recently appointed CEO emphasized still opposite RTL that Blokker would not be sold for the first three years. That is still the ambition, Stapert now says. “Raising financing without selling is still preferable. We would like to take Blokker further for another two to three years. However, in the current situation we also believe that it is our responsibility to explore the option of selling.”
In Mirage’s annual report, published three weeks ago, the retail company already wrote that it urgently needs new capital. The credit line that Mirage previously took out to finance inventories will expire “early 2024”. If it is not possible to attract a new financier, the group’s survival is at risk, the report says.
Toy chain
All hopes were pinned on toy chain Intertoys, the most successful (and therefore most marketable) part of Mirage. The parent company had wanted to use the proceeds from that transaction to keep the other companies running. However, the intended buyer withdrew at the last minute. The sales process of Intertoys has subsequently been stopped for the time being, Stapert said.
The credit line was mainly intended for Blokker, the CEO now confirms. According to him, Intertoys is “easily financeable” as an independent company. The toy chain achieved an operating profit of 12 million euros last year – turnover grew by almost 10 percent in one year. Blokker, on the other hand, sold barely more than in 2022 and suffered a gross loss of 2 million.
Stapert emphasizes that in the search for a buyer, the continuity of the household chain is the “most important thing”. “We have made a selection of parties that we think could potentially be good owners.” According to him, it concerns a mix of retail companies and investors. Mirage would ideally remain as a minority shareholder after the sale, he says.
Valuation
When the current owner, Michiel Witteveen, took over Blokker in 2019, it was because the family that once founded the chain saw him as a “good family man”. Blokker had been struggling for years at the time, suffering hundreds of millions of euros in losses. To ensure the future of the company and staff, the family asked for one symbolic euro. They also donated 160 million worth of stock and cleared outstanding debts. In addition, Witteveen received a sum of money, reportedly around 250 million euros.
That capital has been used in recent years to absorb losses, while the new owners tried to get Blokker and the other Mirage chains running again. Witteveen also kept close contact with the family after the sale, he said later NRC. Also on a ‘professional basis’. Did they know about the sales plan? Stapert: “They are not involved in these types of decisions. We still have regular contact with representatives of the family.”
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All Blokker’s hopes were pinned on the sale of Intertoys. That failed. And now?
Profitability
The question now is how much such a sale yields. When valuing a company, investors typically look at profitability. Their valuation is often several times the operating profit, with the factor depending on how attractive an industry is. But if that result is negative, doesn’t that make the value of a company virtually zero?
Stapert sees it differently, he says. “There are more ways to value a company. You can also look at the potential. At Blokker you see: we are coming off huge losses, but this year we expect to break even, or even slightly positive.” There is still room for growth, Stapert expects. In the document that the F.D Mirage expects Blokker’s gross profit to amount to 28 million in two years.
It will become clear in the near future whether interested candidates are just as optimistic about the future of the household chain. “Give it three to four weeks,” says Stapert. “Then we know better where this is going.”