Mountain Warehouse, the British specialist retailer, has been identified as the company that has been holding talks to purchase some of the assets of Euromark, the large-scale Polish outdoor distribution and retail group that went bankrupt a few weeks ago.
Euromark filed for bankruptcy late last year and a district court in Warsaw confirmed in January that its assets were to be liquidated. The failure sent shock waves through the Polish outdoor industry, since Euromark was one of the leading players in the market: Its Campus and Alpinus brands are among the country's most recognized specialist brands; and Planet Outdoor, its multi-brand retail format, had more than 20 stores.
Euromark is listed on the Warsaw Stock Exchange but owned at a majority by Tim Roberts, the British businessman behind Eurotech Leisure, the company selling Khyam and Wynnster.
The Polish business expanded steadily for several years until it reached sales of about 109.2 million zlotys (€26.2m-$35.1m) for the fiscal year until the end of August 2011, up by 5.6 percent, with a small profit of PLN 279,000 zlotys (€66,944-$89,623). But the situation deteriorated markedly at the end of that year, with a sales decline of 40 percent in December 2011. Sales picked up in January and February 2012, only to fall steeply again from March.
Jim Kelly, president of Euromark's management board, resigned toward the end of March and a new board was installed at the beginning of May, headed by Roberts himself, who then held 61.3 percent of the company's shares. The company's business was further affected by the European football championships, which were partly held in Poland and distracted the country's consumers from outdoor activities. For the 11 months until the end of July 2012, Euromark reported that its sales declined by 14.3 percent, after a drop of 31.6 percent in July alone.
The situation became untenable for Euromark as banks started to worry about its financial situation and decided to cut their support after the summer. Euromark was apparently unable to convince the banks that its planned restructuring measures would work out.
Mountain Warehouse did not respond to inquiries about its interest in Euromark, which was publicized by the Polish company's trustee in bankruptcy a few days ago. The retailer has stores across the U.K. and a few more in Ireland, Austria and Poland. Mountain Warehouse specializes in ski and outdoor gear for the entire family, providing almost solely private-label products.
However, the talks are apparently not progressing rapidly, if at all. Last week, Roberts resigned as president of Euromark's management board, citing concerns about the company's inability to maintain the asset value of the business under current trading activity, and the lack of progress in selling the business to a competent body of which he has no influence or control. The supervisory board's chairman resigned the same day, along with other members of that board. The trustee could not be reached for comment.
The demise of Euromark comes shortly after the collapse of a relatively low-end outdoor retailer, Cerro Torre, which had more than a dozen stores in Poland.