Sharp criticism of crisis management at Action and Hunkemöller

The Dutch association of private equity companies (NVP) denounces the way in which the owners of Action and Hunkemöller are coping with the corona crisis. According to the lobby club, these retailers are shifting the consequences of the crisis too quickly and unilaterally to others.

One-sided decisions

Action, which is owned by the British investor 3i, recently unilaterally extended the payment period to suppliers by one month to 90 days. The chain took this measure to compensate to some extent for the sharply reduced revenues as a result of the corona crisis. Lingerie chain Hunkemöller, which is controlled by the American investor Carlyle, even decided to stop paying rent at all.

“Private equity should behave correctly like no other”, according to Annemarie Jorritsma and Tjarda Molenaar, respectively chairman and director of the NVP. “There is a time after corona. We look at the long term. So you have to take into account the consequences of your decisions”, they say to newspaper FD.

The NVP has meanwhile criticised Action for extending the payment term. After all, in the Netherlands a maximum payment term of 60 days applies to SMEs. “Fortunately, they corrected themselves quickly,” says Jorritsma.

Negative image

Above all, the NVP fears that the mistakes made by some investors will have a negative impact on the entire sector, which already suffers from a negative image. Some 1,400 companies in the Netherlands are currently owned by investment companies. Capital providers, such as pension funds, could turn away from private equity for social reasons, Molenaar believes. “Investors want to invest their money in a socially responsible way. That also means that you deal neatly with partners such as suppliers and landlords. So now is the time to show that.”

Action-owner 3i said that it had “done the right thing” by quickly reversing the measures for SME suppliers after the criticism. According to the company, as a result, small suppliers have never been paid later.

Hunkemöller, on the other hand, points to the huge impact of the store closures. The lingerie chain states that it was not possible to first negotiate with all 150 Dutch landlords. “We now pay landlords in proportion to our store sales,” adds the company.