Marinopoulos Files for Bankruptcy:
the Rise and Fall of an Empire
Dimitris Marinopoulos began a small store at Exarcheia Athens Greece 1893.
Now he rolling over in his grave.
The end of an era has come for Marinopoulos,
One of Greece’s largest supermarket chains, that filed for bankruptcy on Tuesday following a domino of events after mounting pressure from suppliers owed a large sum of money and creditor banks pressing for debt payments.
July 1 has been appointed as the date for the liquidation process to begin in accordance with article 99 of the Bankruptcy Code.
Marinopoulos has been granted protection until discussion concerning the application for bankruptcy begins.
The supermarket owes a tide of debts to 3,000 suppliers worth hundreds of millions of euros. There are fears that the company’s closure could result in a domino effect and lead to more closures.
Carrefour Marinopoulos, created in 1999, was a 50-50 joint venture between the Greek Marnopoulos Group and the French Carrefour Group and was a robust business until 2012 when Carrefour decided to withdraw due to the Greek crisis leading to a decline in the chain’s market shares.
There is talk that the problems began when the French administration pulled out of the business, with claims of bad management that brought the once-lucrative business to destruction.
Now the future of suppliers and 13,000 workers is up in the air.
In filing for bankruptcy, the management’s main goal was to put an end to the daily confiscations and stop suppliers from pulling down their products.
In this way, Marinopoulos has managed to gain two months worth of protection in order to seek a partner after the discussion for a collaboration between Marinopoulos and Sklavenitis, another large supermarket chain, proved fruitless in February 2016.
The Marinopoulos story
Marinopoulos began as a small chemist store opened by Dimitris Marinopoulos at Exarcheia in 1893.
A few years later, he transferred his business to larger premises at the corner of Solonos and Zoodohou Pigis streets.
With business thriving, Dimitris Marinopoulos and his brother, Panos, decide to open another chemist store at Filellinon Street.
Praised at the time by the local press, the store offered more than just medical supplies.
By 1900 the store run by the Marinopoulos brothers was a point of reference, and by 1908, they embellished their stocks supplying beauty products, children’s supplies under the royal seal of the king.
In 1949, the brothers established the FAMAR pharmaceutical company and that was just the start of the family’s rise to fame and fortune.
In 1962, the family created their first supermarket, known as Self Service Marinopoulos.
Just a year later, they collaborated with French Le Printemps and renamed the company to Prisunic Marinopoulos, otherwise known as PM in the Seventies.
The collaboration ended at the start of the Nineties when the French group began to have problems. In 1982, Marinopoulos created the Beauty Shops chain. In 1990, they worked with the British Marks & Spencers.
The Carrefour Marinopoulos collaboration kicked off in 1999, following in 2002 with Starbucks and Fnac.
Marinopoulos: decline and fall of a retail giant
July 7th 2016| Greece | Retail
On July 1st the Athens Court of First Instance handed a temporary reprieve to supermarket operator Marinopoulos in the face of bankruptcy claims by its creditors.
The retail giant won temporary protection from bankruptcy until September 21st, when the court will consider its petition for a reorganisation process.
The privately owned group, which employs more than 12,500 people and runs more than 800 stores, had sought protection from creditors to allow for a restructuring of its business.
The decline and fall of the retail giant mirrors the travails of the Greek economy since 2010. If Marinopoulos goes under it is likely to worsen the country's already dire economic plight.
The Marinopoulos family's first foray into business was in the form of a pharmacy, back in 1893, the year that the then prime minister, Charilaos Trikoupis, famously declared Greece bankrupt.
The pharmaceutical business developed independently and the family started its first supermarket much later, in 1962—another landmark year for Greece, as its association agreement with the EU came into force.
In 1999 the family entered into a partnership with a French multinational retailer, Carrefour, and the business grew to the extent that Marinopoulos became a leading retailer.
The partnership ended on the eve of Greece's second general election in 2012, when Carrefour pulled out, although it sanctioned continuing use of the brand.
By 2015 Carrefour had slipped into second place behind Belgium's Delhaize in terms of market share, but still had a sizeable 6.3% share of the Greek retail market.
Marinopoulos had debts of €1.3bn at end-2015
In its latest published accounts, for financial year 2014, the supermarket chain posted a turnover of €1.6bn.
It has been consistently loss-making since the start of Greece's financial crisis in 2010.
On July 1st 2016 the company sought, and secured, a stay of proceedings against it, pending the hearing of a filing for its reorganisation on September 21st.
The Court of First Instance decided that "the group's property will be protected from creditor foreclosures, freezing any disposals of real estate and equipment".
The court also ruled that Marinopoulos's employees should be excluded from the temporary protection, allowing them to take legal action should the company stop paying their salaries.
In its filing to the court, which was leaked to the media, Marinopoulos revealed that it has debts of €1.3bn (0.76% of GDP). Of this, €100m is owed to the state in the form of taxes and social security payments.
About five times as much is owed to financial creditors.
Half of that is spread among Greece's four systemic banks and one leasing company, and some of the balance is owed to the family's own holding companies.
This leaves a gaping €723m owed to trade creditors at the end of 2015. This is likely to have grown over the past six months. When Carrefour exited the business in 2012, the figure stood at €524m. Many Greek food manufacturers long since stopped selling to the firm.
Among those businesses left with receivables that appear uncollectible are Sarantis (cosmetics), owed €6.4m (2% of Sarantis's turnover); Creta Farm, a cold-cuts business recently funded by the EU, owed €8.6m (8% of its turnover); a competitor of Creta Farm, Nikas, owed €3.2m (6.5% of its turnover); Delta Dairy group, owed €18.7m (6.1% of its turnover); and a bread products manufacturer, Karamolegos, owed €10.8m (14% of its turnover).
In addition, hundreds more small suppliers (some estimates have this figure at 3,000), as well as 12,500 employees whose jobs are at risk, are collectively owed €4.3m. The gravity of the situation was not lost on the IMF, which has expressed its concern at the latest turn of events.
Is there a way out of the Marinopoulos mess?
Voluntary reorganisations do not always conclude successfully, and many Greeks still have bad memories of a similar situation at a much smaller local chain, Atlantic, which finally closed down in 2011, two years after trying to restructure.
The Marinopoulos situation had clearly been untenable for some time.
In February 2016 a competitor, Sklavenitis, offered to take over the management of the group's 33 hypermarkets.
Sklavenitis has been rapidly catching up with Marinopoulos, and in 2015 had a market share of 6.2%.
However, the deal seems to have fallen through.
The Hellenic Competition Commission was notified in April 2016, but it is not clear if competition concerns or financial disarray was the deciding factor.
Sklavenitis has expressed an interest in the continued pursuit of a deal, which would make it the leading retailer in Greece, but says that its interest is contingent on Marinopoulos being able to preserve its network of stores.
This will be trickier than it may seem, as the legal protection sought by the firm does not extend to unpaid rents, and it could face evictions.
There is also a possibility that Sankaty, a subsidiary of Bain Capital, a US global investment firm, together with another US-based investment firm, Bartons, might form an international consortium.
Sankaty has been known to make bold Greek bets, but it is unlikely to offer the continuity that many of Marinopoulos's creditors will be seeking (about 45% consented to the court's decision to provide temporary protection against bankruptcy proceedings).
Marinopoulos is not the only one in trouble
The Marinopoulos family is facing recriminations in the media, which claims that it has been hoarding money and assets abroad.
Considering the large debts the firm owes to the state and that many family members hold directorships in the group's companies, family members could also eventually face criminal charges.
At the same time, there could be damaging effects on other parts of the family's business, which includes the local distribution of Starbucks and GAP, and a number of other retailing activities.
Almost concurrently, another major Greek business, Jetoil, which manages a chain of 600 petrol stations, also filed for bankruptcy protection.
Three weeks before the Marinopolous case came to court, a fuel company, Mamidoil, owned by the Mamidakis Group and known by the brand name Jetoil, successfully applied for protection from its creditors, to whom it owes €315m.
The company blamed its debts on the contraction of the Greek economy and the reluctance of local banks to finance its activities, mainly through providing guarantees for oil imports.
The company's problems have worsened since the imposition of capital controls in June 2015. The co-founder and owner of the company, Kyriakos Mamidakis, committed suicide in early July.
Greece's small business institute estimates that 45,000 jobs were lost from small businesses in the second half of 2015.
The rate of bankruptcies of small businesses appears to have accelerated in the first half of 2016, as many are no longer able to cope with the ever-increasing tax burden or mounting indebtedness.
The issue of business failure is thus becoming increasingly politically sensitive; however, the supposedly liberalised market of corporate non-performing loans has yet to take off, hindering any improvement.
High levels of taxation and political uncertainty continue to dampen demand, both retail and investment, holding back the economic recovery.
The government will face an uphill struggle to implement its agreements with the country's international creditors.
Source: The Economist Intelligence Unit
Time running out fast for Marinopoulos
Time is running out for Greece’s biggest supermarket chain, Marinopoulos, as every day that goes by sees it deteriorating even further.
Some of the parties involved are hoping for an end to negotiations within this week, so that a streamlining agreement can be submitted and approved by the courts in September.
The final word belongs to the crediting banks, which in less than six months have been asked to pay a total of half a billion euros – 140 million in spring and 360 million this summer – to an enterprise that is not at all certain to pull through and be able to start developing again.
Besides that, banks also appear to have differing views on the level of the interest rate that will be imposed.
Alternate Finance Minister Tryfon Alexiadis said in Parliament on Friday that the government will introduce a special regulation for Marinopoulos’s suppliers, who are owed millions of euros, without offering any details on its content.
He added that the government is preparing a response to the problem concerning all of the chain’s suppliers, not just agricultural producers, as it “examines the issue of Marinopoulos on a more general basis,” Alexiadis stated.
Marinopoulos - The Cascade Of A Possible Bankruptcy
It provides for scary reading because it shows the follow-up damage which comes as the result when a large company goes bankrupt (n. b.: Marinopoulos is not bankrupt yet but it doesn't look good).
The casual newspaper reader might say ok, there is a large company going out of business; too bad for the employees but that's that.
What that casual newspaper reader does not understand (yet) is that there are enormous consequences of such a bankruptcy which might even affect himself.
For starters, Marinopoulos has over 1,3 BEUR in liabilities, i. e. money which they owe to someone else.
One might say ok, so the banks will have to take a loss but that's their problem because they made bad loans.
When 4 banks have to take losses of over 500 MEUR, that may quickly turn out to be not only the banks' problem but someone else's, too.
Marinopoulos owes over 700 MEUR to trade creditors.
Now the bullets are starting to hit closer to home because the reverse conclusion is that trade creditors may lose over 700 MEUR.
Huge amounts of money are owed to individual large suppliers which raises the question how those suppliers will handle those losses and whether, perhaps, there will be another chain reaction among the suppliers and their creditors.
But then there are also an assumed 3.000 small suppliers, perhaps even your small neighborhood farmer, who might be entirely wiped out by their losses.
Taken in sum, a Mariopoulos bankruptcy would cause shock waves throughout the Greek economy whose final impact can only be guessed at this point.
And then the next question is: Will there perhaps be another Marinopoulos soon?
The Marinopoulos chain was established in 1962 and is the largest retail chain in Greece.
Until four years ago, French multinational Carrefour claimed the title of Greece’s largest supermarket chain through a 50/50 joint venture with Marinopoulos.
The French giant’s share was bought out by the Marinopoulos Group, amid much fanfare, in 2012.
Marinopoulos had a total of 823 stores at the end of March 2016.
Earlier this year, it filed for bankruptcy, having run up debts of 1.3 billion euros, an unprecedented amount for a Greek company.
Of that, 723 million was owed to suppliers and creditors, 4.3 million to employees and 338 million to lenders, while 159 million was in unpaid rent and 100 million in unpaid taxes and social security contributions.
Marinopoulos had sought a three-month protection order two months ago as a first step toward avoiding its collapse. The group pointed the finger at Greece’s ongoing economic troubles for its waning fortunes, as well as internal devaluation.
Revenues had been dropping over recent years, while operating expenses had increased.
Sklavenitis stepped in early on as a key player in saving the chain, and on Wednesday confirmed it would buy out Marinopoulos using up to 360 million euros of bank financing.
Reports say the proposed restructuring plan includes a 50 percent haircut on the amounts Marinopoulos owes its suppliers.
All that appears to be left now is for National and Piraeus banks to OK the deal. At this stage, it is thought that little can derail the negotiations since the issue has already passed through the relevant committees at the two banks. Going forward, Sklavenitis will act as strategic investor for the Marinopoulos Group.
The deal will be welcomed with much relief since the size of Marinopoulos’s turnover represents around 1 percent of Greece’s GDP. Its collapse therefore had serious implications for the country’s economy as a whole.
It will also be good news for the group’s approximately 2,000 Greek suppliers, some of whom face bankruptcy themselves as a knock-on effect of the supermarket’s collapse, and the 12,500 employees who would be added to Greece’s already inflated unemployment figures.
As part of the agreement, the legal framework outlines that, among other conditions, banks owed money by the group have to agree to the transfer of all of Marinopoulos into a new company, which will be 100 percent controlled by Sklavenitis
Τίποτε πιο δυνατό από το άρωμα φιλίας, όταν αυτή δεν εξαρτάται από συμφέροντα και υστεροβουλίες.
Ολοι εμείς που γνωρίσαμε τον Δημήτρη Μαρινόπουλο με τη βαθιά φωνή και το καθαρό μυαλό στις οικογενειακές και όχι μόνο κοινωνικές συναναστροφές, ξεχωρίσαμε αμέσως τον σεμνό άνθρωπο που δεν μιλούσε ποτέ για τον εαυτό του ή για το μεγάλο έργο προόδου, στον τομέα επιχειρήσεων, που τον θεμέλιο λίθο έθεσε ο πατέρας του, ο Πάνος Μαρινόπουλος, με το ονομαστό φαρμακείο στη γωνία Πανεπιστημίου-Πατησίων, στα Χαυτεία, στην καρδιά της Αθήνας, στην ανατολή του 20ού αιώνα!
Είχε βαθύτατο σεβασμό στον πατέρα του, από τον οποίο άντλησε την πίστη στις παραδοσιακές αξίες, όπως η εργατικότητα, η μόρφωση, η υπεύθυνη στάση στα προβλήματα της ζωής και η αγάπη στην οικογένεια.
Το 1919 γεννήθηκαν τα παιδιά του Πάνου, τα δίδυμα αδέλφια Ιωάννης και Δημήτρης που πήραν το όνομα Μαρινόπουλος, από τη στέρεα βάση που δημιούργησε ο πατέρας τους και το ανέβασαν ψηλά, δημιουργώντας το 1949 τη φαρμακοβιομηχανία «ΦΑΜΑΡ» και, μερικά χρόνια αργότερα, την αλυσίδα σούπερ μάρκετ «Μαρινόπουλος», βλέποντας πάντα μακριά.
Με αποτέλεσμα το 2000 να συγχωνευθεί με τη γαλλική εταιρεία Carrefour, δημιουργώντας τη μεγαλύτερη αλυσίδα σούπερ μάρκετ στην Ελλάδα.
Ολα αυτά τα γνωστά και θαυμαστά έργα του Ομίλου Μαρινοπούλου, όπου συμμετέχουν δημιουργικά και οι γιοι Πάνος και Λεωνίδας Μαρινόπουλος του Δημήτρη και της Ντόλλης Μαρινοπούλου, το γένος Κωττάκη, και οι Πάνος και Στέφανος Μαρινόπουλος του Γιάννη και της Μάρως Μαρινοπούλου (το γένος Αλευρά, μιας μεγάλης σμυρναίικης οικογενείας).
Μια ματιά στις δύο σελίδες του βιογραφικού του Δημήτρη Μαρινόπουλου λέγει πολλά για τις επιτυχείς επεκτάσεις στην εστίαση με τη συνεργασία του Ομίλου, με τη Starbucks Coffee International, με την εταιρεία καλλυντικών SEPHORA, με τον βρετανικό όμιλο MARKS & SPENCER, με την GAP και άλλες διεθνείς φίρμες.
Οι γραμμές αυτές αποχαιρετισμού ενός καλού φίλου, που έφυγε από τη ζωή και κηδεύτηκε στις 23 Δεκεμβρίου 2010, μέσα στον στρόβιλο των χριστουγεννιάτικων εορτών, των απεργιών και της κρίσης, έχουν να υπενθυμίσουν πως το μέλος του ΣΕΒ (Συνδέσμου Ελληνικών Βιομηχανιών) και πρόεδρός του πριν από τη δικτατορία (στη διάρκεια της οποίας άφησε τη θέση του για να την επανακτήσει από το 1974 ώς το 1978) είχε βασίσει τη σταδιοδρομία του στην απόκτηση παιδείας κι όχι πτυχίων.
Ενώ πήρε το πτυχίο στο Φαρμακευτικό και Χημικό Τμήμα του Πανεπιστημίου Αθηνών και τον διδακτορικό του τίτλο στις Φυσικές Επιστήμες από το Πανεπιστήμιο της Σορβόννης, όντας υπότροφος του γαλλικού κράτους στη συνέχεια, μάστερ στη Διοίκηση Επιχειρήσεων στο Πανεπιστήμιο Columbia, μετά επέστρεψε στην Ελλάδα κι εργάστηκε εδώ, μαζί με τον αδελφό του Γιάννη, σε συνεχές ωράριο προκοπής.
Ποτέ δεν χρησιμοποίησε τον τίτλο του δόκτορος πριν από το όνομά του.
Κι όταν ένας νέος επιστήμονας και σκηνοθέτης αρρώστησε βαριά, έτρεξε στην Ευρώπη, κίνησε γη και ουρανό για να φέρει στην Ελλάδα τη σειρά των νέων φαρμάκων που μπορούσαν να τον κρατήσουν στη ζωή, αλλά ήταν πια αργά...
Γι' αυτόν τον φίλο που έφυγε και που ήταν φανατικός αναγνώστης της «Καθημερινής», όπως και ο αείμνηστος αδελφός του Γιάννης Μαρινόπουλος, θέλουμε να ιστορήσουμε κάτι που τον είχε τον ίδιο πολύ διασκεδάσει.
Στο ζωηρό Αγρίνιο Αιτωλοακαρνανίας, σε μια φιλική πρόσκληση, πριν από χρόνια, είχε εγκαινιασθεί το «Σούπερ Μάρκετ Μαρινόπουλος».
Είπαμε να πάμε πρωί να το επισκεφθούμε. Φθάσαμε μπροστά στις κλειστές γυάλινες πόρτες, αλλά ο φύλακας δεν μας άφηνε να μπούμε. «Κυριακή σήμερα, δεν ανοίγουμε! Δεν μπαίνει κανείς»! Χαμογελούσε κάτω από το μπλε σκούρο ναυτικό κασκέτο του ο Δημήτρης Μαρινόπουλος, χωρίς να λέει τίποτα.
«Μα είναι ο κ. Δημήτρης Μαρινόπουλος, ανοίξτε μας, παρακαλώ», λέγαμε εμείς, της λοιπής συντροφιάς. «Οποιος θέλει ας είναι, δεν ανοίγω!
Και πού τον ξέρω εγώ, τον Δημήτρη Μαρινόπουλο;» ανένδοτος ο φύλακας.
Ετυχε να περνά ένας υπάλληλος, είδε την παρέα μπροστά στις κλειστές πόρτες, πλησίασε, και μόλις είδε τον Δημήτρη Μαρινόπουλο «Ανοιξε, άνοιξε τις πόρτες! Περάστε κ. Μαρινόπουλε», φώναξε στον φύλακα που, καταμουδιασμένος, ξεκλείδωσε την πόρτα.
«Με συγχωρείτε, δεν φαντάστηκα...», δικαιολογήθηκε ο φύλακας.
«Τη δουλειά σου έκανες, και την έκανες πολύ καλά», είπε ο Δημήτρης Μαρινόπουλος, δίνοντάς του το χέρι.
Αυτός ήταν, έτσι θα τον θυμόμαστε, τον Δημήτρη Μαρινόπουλο που έφυγε, εργαζόμενος στα 92 του χρόνια, αφήνοντας καλή σύζυγο, άξιους διαδόχους, εγγόνια, δισέγγονα, τη χαρά μιας δεμένης ελληνικής οικογένειας.