Dutch Blokker Holding has announced a thorough restructuring plan, which will spell the end for the retail group as it sells off all subsidiaries, except the eponymous chain. But is it also the start of something new, or merely delaying the inevitable?
Altered consumer behavior
In normal times, Blokker Holding publishes its financial results at this time of year, but that has not (yet) happened. There seems to be a very simple reason for that, namely Tuesday’s press release saying that the holding basically no longer exists. Hundreds of stores will be shut down and Bart Smit, Intertoys, Maxi Toys, Xenos, Big Bazar and Leen Bakker have been put up for sale.
Does this come as a surprise? Blokker’s issues have been around for a while: the company has been onerous since 2015, having to face strong, new competitors (Action, Bol.com) and having failed to tap into the altered consumer behavior. Its new store formula is more in tune with the online sales channels (including pillars in the store), have a more organized store design and its own private label also brings it closer to a contemporary chain.
Will this enormous sale help the group survive? Is there a future for Blokker in this leaner company structure? “Every store chain born in a world without internet that hasn’t altered its structure drastically, will inevitably face this fact”, RetailDetail’s Jorg Snoeck said.
“Blokker used to be a traditional purchase organization, structured to buy items that rotate very quickly very cheaply and to sell those at low prices but in high volumes. This business model no longer works. You simply cannot beat the limitless product ranges at incredible prices that you can find online. The consumer wants to be catered to thanks to a personalized product range.”
“Nevertheless, there is still a market for Blokker, but it will need to change radically. How? Stores have turned into service points and display cases. Look at Coolblue for instance. Blokker will need to innovate and become the consumer’s friend and confidant once more, but that will require a huge turnaround.”
The question is whether Blokker can do that, because it is not easy to reverse course in such a big enterprise. “It is no longer the largest business that wins, but the one with the most speed”, Snoeck confirms. “I feel it was a missed opportunity when the company did not let former CEO Roland Palmer finish his job. Under his supervision, Nextail would have probably become one of Europe’s largest online platforms. Right now, he is plying his trade at Alibaba…”
It also remains to be seen who will buy those structurally onerous chains? “Big Bazar, an Action-typed store chain, has potential. Jysk could benefit from Leen Bakker if it seeks rapid Benelux expansion, but those other chains? The toy market is in a lot of trouble with competition from online players like Bol.com. Colruyt Group’s Dreamland is also a major competitor in Belgium and those pose huge challenges. Don’t forget that there are only a few “moments of truth” for toy chains every year…”