SuperBiomarkt Takes Over Supernatural Stores

At the beginning of April, SuperBiomarkt AG (Munster) will suddenly get three new stores. Michael Radau is taking over three stores from his competitor Supernatural. The reorganisation of Supernatural, that repositioned itself last summer, obviously did not go according to plan. This joint stock company is now making another attempt with fewer stores and an improved concept.

Picture: The Supernatural concept was not a success

“Now we’ve got as many as we want,” says Michael Radau (picture), pleased with the addition of stores in Bonn, Düsseldorf and Mönchengladbach that have been operating under the name of Supernatural. Radau calls the decision of his competitor “a correct and significant step by Supernatural and a good opportunity for SuperBiomarkt AG to make an impact in the core region of North Rhine Westphalia.”  Thus, from April 1 SuperBiomarkt will gain 1100 m² of floor space. With Bonn and Mönchengladbach it will be opening up new towns for its operations; it will be its second store in Düsseldorf. The Düsseldorf location is especially pleasing, because it offers the opportunity to expand. It is interesting to note a rather strange development: in 2001, SuperBiomarkt had already taken over the store in Aachener Strasse (picture below) from the insolvent Oekoland AG which was the forerunner of Supernatural AG. However, the store subsequently went back to Andrew Murphy’s Supernatural AG.

Less than a year has passed since Supernatural was in the headlines. Because of the precarious financial situation, the Managing Director Andrew Murphy resigned at the insistence of the Supervisory Board in the summer of 2005. His post was taken by Ruben Wend, a business management graduate with experience of the retail food trade. It was his job to solve the company’s problems and get it out of the crisis. On account of the level of debt, Supernatural’s main shareholder, ASI Natur, in the person of the Swiss financial advisor Theo Häni, had advocated a reduction of capital at the time and this had been accepted by the Annual General Meeting. Also, ASI provided credit and a loan at a favourable interest rate to overcome the liquidity bottleneck. They wanted to float the stranded ship by means of a new appointment and a new concept for the five Supernatural stores.

The plan did not, however, produce the desired results. Christoph Soika (picture), a member of Supernatural’s Advisory Board, attributes this to the fact that there were more liabilities than were apparent when the change of management was carried out. Although the losses were eliminated by reducing the capital, a number of liabilities and high administration costs remained. “The additional capital we put into the business was not enough to keep the five stores going,” says Mr. Soika. “We would soon have been back where we were last year, and we did not want that to happen.” For this reason they looked for other ways to solve the problems at the end of last year and they came up with the one to sell to SuperBiomarkt AG. Top priority is now concentrating on further developing the concept. The Supervisory Board obviously thinks the capital is better invested in this strategy than in a marathon to restore profitability that would probably not succeed in any case. Moreover, Supernatural considers the locations unsuitable for the concept that Supernatural now want to develop. In Mr. Soika’s opinion: “Concept and location must be in harmony. The stores don’t fit our concept but they do fit that of SuperBiomarkt.”

At the beginning of April all will be revealed regarding the further development of the Supernatural concept. This is when the store in Bonn’s Sternstrasse that has been subjected to a complete overhaul, will open (picture). The company closed its store in Bergisch Gladbach in February and the lease was not extended. Ruben Wend, Supernatural’s managing director since last year, explains the decision to carry on with just one store: “Giving up three stores is another necessary and consistent step on the difficult path to returning Supernatural AG to financial health.”

With its new stores in NRW, SuperBiomarkt AG will have a total of 5500 m² of floor space and, according to a press statement, it sees itself “in the lead in the wholefood business in NRW in terms of shopping area and turnover.” The nine SuperBiomarkt stores achieved a turnover of approximately 12 million Euros in 2005. At the same time, Mr. Radau put 1.3 million Euros into two new stores, a new goods management system and the re-launch of two other stores. “The current SuperBiomarkt stores have reached a high standard so that we will now turn our attention to further expansion and we can concentrate on reorganising the three new stores,” says Mr. Radau. He does not doubt that this will mean a lot of work, but his colleagues are very motivated. SuperBiomarkt AG is taking over the whole staff of Supernatural apart from the administration headquarters in Bonn. Mr. Radau is planning to reorganise the product range and to create service counters for bread, cheese and sausage.  Re-fitting the stores will take place in May/June when they will be closed for a short period. April 1 is the day when the new goods management system will be operating in the three new stores.

Without wanting to go into details, Mr. Radau considers the conditions for taking over the stores to have been favourable - it did not call for a huge financial effort on the part of his company. Initial talks began in the autumn and they soon agreed on the details of the takeover. In his opinion, Supernatural AG benefits from the fact that it can now consolidate without the burden of a too large administration (five people). Incidentally,  the investor Theo Häni has a seat on the Advisory Board of SuperBiomarkt AG, too.