Published On:Friday, January 27, 2012

By NEIL HARTNELL

Tribune Business Editor

SOME 65 jobs are set to be lost with the closure of Robin Hood's Tonique Williams-Darling Highway store, the retailer's president last night telling Tribune Business he had little choice but to liquidate the company after it suffered a $3.6 million net loss in the past year.

An emotional Sandy Schaefer said the closure of the retailer's second store on Prince Charles Drive, a victim of a delayed opening and the ongoing roadworks, had prevented the company from generating a return on its investment in the property - and resulted in it losing more in the past 12 months than it had collectively earned in the previous four-five years.

Explaining that the businessman Hubert Pinder's failure to invest in, and recapitalise, Robin Hood as promised had occurred at "the worst possible moment", Mr Schaefer said attempts to attract in other investors had failed.

Staff were informed of the closure plans last night, with Robin Hood now set to sell-off its remaining $1 million worth of inventory over the next few days to raise cash to settle with local creditors and suppliers.

Upset at the demise of a business he had built up over a 13-year period, having arrived in the Bahamas in 1999, Mr Schaefer said the possibility remained that he might "re-organise, re-group and re-open" Robin Hood's Prince Charles Drive store under another business name after closing down Tonique Williams-Darling Highway site, adding: "I haven't gone quietly into the night."

And the Robin Hood president also seemingly took a swipe at so-called establishment forces that he blamed for the retailer's demise, referring to "the invisible hand" that prevented him from opening the Prince Charles Drive store in time to catch the 2010 Christmas shopping season.

"At this point, we're unfortunately going to have to close," Mr Schaefer told Tribune Business. "It's kind of a sad end to 13 years of effort, and it's a particular sadness, because I feel like the bad guys won."

"Nobody can discount the fact that we changed retailing here. We forced prices to go lower, not by virtue of what we sold, but by the pressure we put on the competition to lower prices for Bahamian consumers."

Disclosing that the Tonique Williams-Darling Highway closure would impact 65 employees, and Mr Schaefer added: "Clearly, we need to wind up the business fairly. We're going to try to do the best we can, and liquidate as much as we can, to take care of local creditors and suppliers, and try and comfort employees as much as we can.

"We've got about $1 million of stock, and are going to sell it for next to nothing to take care of the responsibilities we have."

Most of Robin Hood's dealings with local vendors and suppliers was on a cash up-front basis. Mr Schaefer said the biggest Bahamian creditor was the Bahamas Electricity Corporation (BEC), something he did "not feel badly about", given the "thousands of dollars worth of compressors" allegedly lost to its service.

Robin Hood plans to liquidate its remaining inventory over the next three-four days, and Mr Schaefer said he was ultimately hoping to recover and go back into business with a core group of employees.

"We may regroup, recover and re-open at Robin Hood 2," he added. "We'd love to do that. It's certainly not the end of the Robin Hood banner, but it will be under a different name with different investors and different investors."

Tribune Business understands that Mr Schaefer had right up until the last minute yesterday been negotiating with potential investors to buy into Robin Hood. Although he declined to give names, this newspaper understands from well-informed sources that he was talking to Dr Arthur Porter, business partner of Dr Conville Brown in The Cancer Centre and The Medical Pavilion.

Mr Schaefer had been desperately seeking fresh equity capital after his original partner, Miami-based Suresh Khilnani, sought an exit. Mr Pinder appeared the likeliest candidate, but his relationship with Mr Schaefer ended in acrimony after the promised capital, and collateral for a $1.3 million loan from another investor, failed to materialise.

That other investor, Tribune Business understands, is Leigh Rodney, the American owner of the Compass Point resort. Mr Rodney is said by sources close to the situation to have provided the financing for Robin Hood's Prince Charles Drive store.

Analysing the factors that drove Robin Hood into its current position, Mr Schaefer told Tribune Business: "As a result of the closing of Robin Hood 2, and the money we had invested in that, we lost over $3.6 million in the last year, and that was more than we made collectively in the previous four years, so it was like I was working for four-five years for nothing.

"The fat lady's warming up, but she hasn't sung yet. I haven't gone quietly into the night. We fought the good fight."

According to accounts previously obtained by Tribune Business, as at June 27, 2011, Robin Hood was suffering from a $1.91 million solvency deficiency, meaning that total liabilities exceeded total assets by this sum.

Robin Hood, at that point, was facing a $2.51 million accumulated deficit, and had sustained a $2.587 million net loss for the year to June 27, 2011. This was based on a $2.656 million operating loss, stemming from general and administrative expenses of $6.865 million exceeding a $4.21 million gross profit. Net sales stood at $14.829 million, with cost of sales at $10.62 million.

The balance sheet position, though, appeared extremely weak at that date. Robin Hood's total current assets, of $2.374 million, were only 26 per cent of $9.281 million in current liabilities, meaning the company had an almost $7 million current solvency deficiency. Accounts payables, monies owed to suppliers and other businesses, stood at $8.602 million.

It appears that overly-aggressive expansion, combined with the ever-increasing competition in the saturated grocery market, led to the retailer's current predicament.

Mr Schaefer, meanwhile, said Robin Hood had put "over $100 million" into the Bahamian economy in the 13 years since it was founded in 1999, employing hundreds of Bahamians in that time and importing $75-$80 million worth of goods.

Asked for the reasons behind Robin Hood's present woes, Mr Schaefer appeared to blame establishment forces in the Bahamian food and wholesale industry, referring to "the invisible hand. The forces that exist on this island that did not appreciate buying goods direct from the US.

"They clearly understood the model for business had changed, although they were reluctant to accept that change, and that what has happened in the US is happening here."

Mr Schaefer was publicly criticised by Prime Minister Hubert Ingraham, while Customs also raided Robin Hood's head office and seized computer equipment that was later returned.