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Ex-Robin Hood Owner Is ‘Done’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE owner of the former Robin Hood retail chain says he is “done” and preparing to leave the Bahamas, after his latest format held a ‘liquidation sale’ at the weekend.

Sandy Schaefer, upon being contacted by Tribune Business over the ‘final closing sale’ for Everything Must Go, said: “I just want to leave this place in peace. I’m done.”

A depressed-sounding Mr Schaefer, who realised instantly why Tribune Business was calling, then disconnected the call and turned his cell phone off, preventing this newspaper from making further inquiries with him.

Banners touting the ‘liquidation sale’, with prices between 30 per cent to 80 per cent off, were placed at the Prince Charles roadside and on the ex-Robin Hood outlet that houses Everything Must Go.

A Tribune Business reporter who visited the retail outlet on Saturday saw that numerous products, initially given discounts of between 30-35 per cent, had all been increased to ‘50 per cent off’ as the store sought to sell-off its last-remaining inventory. The shelves where home appliances and televisions were stocked were almost completely bare by late Saturday afternoon.

Several sources had suggested Everything Must Go’s closure came after it ran into regulatory issues with the Government, but K P Turnquest, minister of finance, said he was unaware of any such problems when contacted by Tribune Business yesterday.

Everything Must Go’s seeming closure, following its opening less than three years ago, marks another episode in the ‘ups and downs’ of Mr Schaefer’s time in the Bahamas.

A colourful, Brooklyn-born entrepreneur, Mr Schaefer brought the Robin Hood format to New Providence in the late 1990s via a discount model that aimed to undercut the prices offered by established Bahamian retailers.

The retailer moved from its original location on Soldier Road to larger premises at the Summerwinds Plaza on Tonique Williams Highway, with Mr Schaefer becoming a tenant of ex-Cabinet minister and MP, Leslie Miller.

Robin Hood was sold to the now-defunct BISX-listed company, Freeport Concrete, only for Mr Schaefer to ultimately buy the business back and run it himself once again.

The retailer expanded into food at the start of this decade, and grew to two stores in late 2010/early 2011 when Robin Hood opened on Prince Charles Drive in the home of the former Pepsi-Cola bottling plant. At that point, it employed several hundred Bahamians.

However, the business became over-extended, and Mr Schaefer in early 2011 became embroiled in a personal row with then-prime minister, Hubert Ingraham, after he criticised the New Providence Road Improvement Project’s impact on his and other Prince Charles-based businesses.

Mr Ingraham, in an unusual move for a prime minister, said of Mr Schaefer: “It is most regrettable that such a person has been allowed to have that type of business in the country. He is not a good person for the Bahamas.”

Mr Schaefer described himself as “shocked and taken aback” by Mr Ingraham’s comments, which were also criticised by Opposition MPs. However, within days of the row Robin Hood was subjected to a Customs raid that took away office computer equipment, although no charges of wrong-doing were ever levelled publicly.

The entrepreneur, though, was unable to save Robin Hood’s floundering business despite an increasingly desperate search for new capital and investors.

He eventually alighted on the late ‘con man’, Hubert Pinder, who used a company supposedly capitalised by $83.345 million worth of “precious gem investments” to both buy into Bahamian retailer, Robin Hood, and then solicit investors to pump up to $20 million into the venture. Their arrangement broke down in acrimony and threats of litigation.

Mr Schaefer, though, suddenly re-emerged two-and-a-half years after Robin Hood’s 2012 demise with Everything Must Go - a concept he said would cut operating costs by 60-65 per cent.

The format, which used only part of Robin Hood’s former Prince Charles store, was founded on being open just three days a week, thereby enabling Mr Schaefer to control key costs - labour and utilities - and minimise inventory shrinkage and theft.

To create the ‘buy now’ impulse, the store, after opening on Thursdays, dropped its prices by 10-15 per cent on Friday and then, on Saturday, dropped throughout the day until inventory was completely clear.

Pledging between 10 per cent to 50 per cent price savings, via innovative sourcing and buying strategies, Mr Schaefer told Tribune Business in a late 2014 interview that Everything Must Go was being established as a ‘Value-Added Tax free zone’.

Emphasising that this did not mean VAT evasion, Mr Schaefer said the goal was for his business to exploit its greater margins by absorbing the tax itself, rather than passing it on to consumers.

Acknowledging that his return, and business strategy, might make “enemies” among rivals in the Bahamian wholesale and retail trade, Mr Schaefer said he had adopted a policy of “100 per cent transparency” with Customs to prove everything he did was legitimate.

“It’s an entirely new retail concept for the Bahamas and the world,” he told Tribune Business. “This is something that will be somewhat unprecedented. We can create an indoor mall experience that is only open three days a week.

“The concept is opportunistic buying, taking advantage of all the connections I’ve established through 45 years of being in retail, buying product for next to nothing and taking advantage of short-batch items; items that have a limited shelf life.”

The businessman, undeterred by Robin Hood’s closure, forecast that Everything Must Go would generate between $1.2-$1.4 million in top-line revenues per month - a target that was “not outrageous” and could be exceeded.

Mr Schaefer explained that Everything Must Go, which relied on quick inventory turns and strong supply chain turnaround, was able to source top-quality product at bargain prices via product returns to the likes of ‘dot.com’ operators and UPS ‘undeliverables’.

Comments

Porcupine 3 years, 4 months ago

I suspect, that he will be only one of many to be leaving The Bahamas in the coming years. Sensible Bahamians will top the list, as they will understand before most, the direction this country is headed. Ask yourselves who will be left. Will it be the job creators? I highly doubt it.

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The_Oracle 3 years, 4 months ago

"Mr Ingraham, in an unusual move for a prime minister, said of Mr Schaefer: “It is most regrettable that such a person has been allowed to have that type of business in the country. He is not a good person for the Bahamas.” Not at all unusual for Mr. Ingraham, as one targeted by him can attest. Apparently very thin skinned. As to Mr. Sheafer, the Bahamas has seen many "colorful Entrepreneurs" over the last century, few of whom last long. Upsetting the existing apple cart never bodes well for the interloper. That will happen in any case soon enough.

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John 3 years, 4 months ago

The retail format Shaefer was trying to implement in the Bahamas could not work for several reasons. First of all The Bahamas is too small to generate the type of sales these type operations need to realize a profit. Secondly because the high shipping costs and front loaded customs duties makes the cost of inventory extremely expensive compared to a store operating in the US. So inventory loss/shrinkage due to theft, damaged or misplaced items is also very high and while it should be at 5%, once it exceeds 10% then those losses are not recovered. Then the general overhead costs for businesses are very high and if the turnover is not sufficient to cover them the business will be like a car stuck in sand. Spinning tires but not going anywhere. And while the government would have one believe there is no impact of VAT on business, there is a 15% at least increase in the cost of goods sold, because businesses must pay the VAT at the boarder. In fact many businesses, after three years, are still trying to find their break even point and trying to return to profitability after the VAT was introduced. Super value has had several price increases over the years. But with there being no real growth in the economy in the 7.5% vat tax was actual a drain and resulted in a 10-15% decrease in sales for many stores.

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B_I_D___ 3 years, 4 months ago

Super Value has shifted there general markup nearly 10% since the introduction of VAT...the cost of doing business here is extreme. Schaefer was known to 'reprice' items through a third party stateside for import, essentially falsifying invoices. Robin Hood essentially dissolved as this link was being revealed. His one key was he had political connections and investigations were held at bay for as long as possible.

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banker 3 years, 4 months ago

This repricing of invoices is an interesting phenomenon. I've seen it work the other way. Bahamian businessmen would set up a flow-thru corporation in Florida, have proxies operate it, but they were the beneficial owners. The corporation would be involved in import/export. It would buy the goods required, mark them up and ship them to the Bahamas. The invoices would be paid with Central Bank approval and the difference between the price and the invoice price is how Bahamian business men got a stash of US dollars outside the country. It is their lifeboat if all goes to hell here.

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John 3 years, 4 months ago

That does not seem sensible at all. if they marked the invoices "UP" it would mean they would have to pay more customs duties and stamp/vat tax. meaning the government would be getting duty of every additional dollar they paid out. Would be cheaper to just apply for a permit to invest overseas

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baldbeardedbahamian 3 years, 4 months ago

SANDY WAS ALWAYS FAIR IN MY DEALINGS WITH HIM. SORRY TO SEE HIM GO. GOOD LUCK TO HIM AND HIS FAMILY.

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banker 3 years, 4 months ago

True dat. Always liked the man.

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banker 3 years, 4 months ago

Valuable collector's item for sale. Never been worn. Will become historic collectible. Act now. Between 10-50% off. Everything must go!

http://tribune242.com/users/photos/20...">http://thetribune.media.clients.ellin..." alt="None">

by banker

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sheeprunner12 3 years, 4 months ago

Sounds like the Bay Street Boys (mercantile elite) finally beat this upstart foreigner into submission ....... smh ........ Will be interesting when Walmart applies to open a store in Nassau

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Greentea 3 years, 4 months ago

Walmart's setup and brands are already present at Solomons...

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Jetflt 3 years, 4 months ago

Walmart is smarter than that!

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John 3 years, 4 months ago

The problem is too much wealth is already being transferred to foreigners by virtue of government's economic policy. Government, over the years, favored and supported foreign investors over Bahamians, so much so that even the white Bahamians are starting to complain. Not necessarily that the foreigner has a better business plan but because he gets so much more concessions and tax breaks from government that his business is more successful, but on the backs of Bahamian taxpayers. And so if you add up the net worth of the top 20 foreign companies (not even including banks), they are worth more than all the Bahamian businesses combined. Doesn't that make you proud? now add the value of foreign banks. And while foreign businesses should continue to be welcome to do business here,in the Bahama,s government must now extend its policy to advance concessions to Bahamians. And in case you don't know it, many of the superpowers, the US and China, especially are in a race to own up (ok hog up) and control as many assets in The Bahamas, The Caribbean, Africa and central and South America as possible.

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banker 3 years, 4 months ago

Oftentimes the reason that foreigners get preference, is that it is all due to business conditions. The prime driver of any business is access to capital. Let's suppose that there is a business opportunity that requires $50 million dollars to start -- build the building -- hire the people -- etc etc.

A business will put some skin in the game and go an borrow the rest. In the USA or Canada, they can go to their friendly banker and apply for a business loan. They can also go to their Export Development programmes run by their respective governments for capital. The lenders get a credit report on the business from a credit reporting agency, and make a loan decision. The government programmes for export development often grant credit to companies that are turned down by the banks, because it is development money. If both these agencies turn down the business loan, the business has the additional option of 'selling paper' -- or floating a commercial bond. The interest rate is dependent on how risky it is, but you can always float paper if the interest rate is attractive enough.

Bahamians do not have access to these lines of business capital. We have no internal credit rating agency. Business records are sometimes sketchy and not up to date. Many businesses do not employ BICA accountants, or an accountant with an international certification and designation. Hence we are behind the eight ball in terms of getting capital together to do business. And if we can raise the Bahamian dollars, we must import millions of dollars of goods and services and must pay the Central Bank fees. Hence it costs more to run a business in the Bahamas if you are a Bahamian.

There is something definitely wrong with this picture as it is. This is why I support dollarization of the economy, even though it would initially create economic chaos, and as usual, the poor would suffer the most. But if we want a future as a country, we must swallow some bitter pills.

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OldFort2012 3 years, 4 months ago

As Banker correctly points out, it is all about availability and cost of capital. The Government should do a deal with the "numbers boys". 75% of their profits should go into a venture capital fund that invests in Bahamian businesses. Let them run the fund. Let them decide who and what to back, with no governmental interference. But invest they must. The money is still theirs, but help the economy they must. They can liquidate the fund at some specified time in the future, say 20 years. This would do much to alleviate just criticism of their role in society and transform the economy.

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John 3 years, 4 months ago

Just don't get venture capital/business loans from RBC. They will suck you dry, especially if you fall on hard times and they realize you are struggling to keep your business afloat. Cheaper to just give them the keys at that point.

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The_Oracle 3 years, 4 months ago

RBC is a disgrace really, as dysfunctional as the Government. Perhaps it is contagious.....

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sheeprunner12 3 years, 4 months ago

What will we all do if RBC pulls out???????? ......... Any suggestions??????

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JohnDoe 3 years, 4 months ago

Why can't Bahamian entrepreneurs do what RBC is doing?

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JohnDoe 3 years, 4 months ago

You guys speak about the lack of access to risk capital as if it is merely an inconvenience. Proper functioning financial and market institutions that promote transparent access to capital, investments in physical infrastructure, technology and innovation are some of the primary drivers of aggregate supply in an economy which in turn drives the capacity and limits of GDP growth. This is a structural weakness in our economy and the primary reason why we have historically relied on FDI to finance GDP growth is that we lack the wherewithal and courage to confront and address the root cause of this structural weakness.

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