The parent company of retail chains Blokker and Intertoys urgently needs new capital to prevent its survival from being jeopardized. The Mirage Retail Group previously took out a credit line with a British lender, but this will end “early 2024”. The retail company must have a new lender within a few months in order to continue paying the bills.
The need for new credit is evident from the annual report for the 2022 financial year, which Mirage filed this Wednesday, on the last day it was still possible. The loan is needed to finance store inventories for later this year, CEO Ynse Stapert said when asked. Stapert does not want to say how much credit Mirage needs.
Mirage is currently borrowing “a fairly low amount” from the current capital provider, the British venture investor Hilco, he says. “But that also has to do with the period of the year we are in now.” If Blokker and Intertoys have to pay for their stocks before the end of the year, the busiest time on the shopping street, the company will have to rely much more heavily on its credit line.
According to Stapert, who succeeded Michiel Witteveen as CEO this month, Mirage “has every confidence that it will be completed on time.” According to him, there is no hard deadline for taking out a new loan facility. “We aim to have this completed by the end of May.” He does not want to answer the question of how much money Mirage currently has in cash.
Difficult for a decade
Blokker Holding, as Mirage was previously known, has been having a hard time for a decade. For example, the chains suffer a lot from competition with online stores and – in the case of household chain Blokker – also from bargain chain Action. For years, Blokker Holding was a dominant player on the shopping street: chains such as Xenos, Leen Bakker, Big Bazar and Marskramer also fell under the group.
After an initial loss in 2014, the red figures quickly piled up, and the parent company recorded a net loss for ten years. Former CEO Michiel Witteveen estimated in his farewell interview last month The Financial Timesthat at the company “as much as a billion euros” has evaporated.
When Witteveen took over the company from the Blokker family in early 2019, he attempted to reorganize the group and then expand it again with well-known store brands. Since the corona pandemic, that empire is rapidly falling apart again. Bargain chain Big Bazar was sold in 2021 and went bankrupt last September. Two months later, Mirage also had to file for bankruptcy of the heavily loss-making electronics chain BCC.
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The chains that are now left are slowly seeing their performance improve again. In the 2022 financial year, Mirage’s turnover remained virtually stable at 928 million euros, but the company was left with a gross loss (before deduction of one-off setbacks) of 43 million euros. Without BCC’s weak performance, that would have been a loss of 6 million euros, Mirage writes.
In the press release about the figures, the company also reports the results of the past financial year, 2023. Mirage ended with a gross profit of 2 million.
Disappointment
This summer, Mirage announced that it was looking for a buyer for Intertoys. That process was almost complete when the buyer dropped out in January, the company reported in its annual report. This was a setback for Mirage: it wanted to use the proceeds to finance the other store brands. Now that the purchase has been canceled, the company is temporarily suspending the sale attempt, and the credit line is therefore needed.
In an attempt to keep that loan as limited as possible, Mirage keeps a close eye on all expenses, the company writes. Another cost item that the company hopes to save on is repaying the corona emergency support. Mirage received around 70 million in tax deferrals during the pandemic, which it must repay over the next four years. The group has now submitted a request to the tax authorities to restructure the remaining amount, according to Stapert. “Discussions about this are still ongoing.”