April 2012 and the future looked assured for the insolvent Alisuper chain of food stores as the then Minister for the Economy, Álvaro Santos Pereira, said the purchase of the business by the Nogueira Group was sending a clear message to other potential investors that "the Algarve remains a secure investment."
Pereira's statement was nonsense then and remains so now as the Nogueira Group, led by José Nogueira, is struggling to cope with seasonal trading and an unremitting level of fixed costs at its Alisuper subsidiary.
Suppliers to the stores now are worried and have started to demand payment for past orders before sending more stock to the Algarve’s 43 stores. Many have stopped supplying, with consequent gaps appearing on store shelves.
In 2012 the Silves-based Alicoop, owners of Alisuper, ran 57 stores which went bust. The stores were closed until the Nogueira group bought the chain for €26 million, re-opening 26 outlets and aiming to re-open the remaining 31 as and when.
In 2009 there were 81 outlets and the collapse of the chain, in an environment of rising costs and falling consumer spending power, was not unexpected.
Nogueira took on the company’s debt in return for control but clearly paid little attention as to how this debt had accumulated with the result that the retailer now is battling seasonality and relentless fixed costs. In addition to supply problems, the business has been late in paying staff wages, sure signs of further trouble to come.
In an interview with Expresso last week, José Nogueira does not admit the business is in trouble, nor would anyone is his position, and said that Alisuper’s problems are being resolved, that the viability of the supermarket chain is not in question and that all wages are up to date.
The store in Olhão has closed due to the landlord's refusal to renegotiate the rent, according to Nogueira who said the payments were too high and had been based on trade in better economic times.
Other stores have had their rents reduced but seasonality is the killer for many public facing Algarve businesses which make 100% of their profits, if there are any, in the three summer months when the region is swollen with tourists. Not losing money in the months just before and after the summer season is seen as remarkable.
It came as a shock to Nogueira that he has to close 18 of his newly acquired stores this winter to cut losses but now realises that stores in tourist zones are best to open for a 6 month trading year, despite rates and rents continuing to be run up with zerio income to cover these costs.
Overall sales in the year after Nogueira bought the company were €27.5 million which in 2014 had risen to €30 million but he commented that the costs, especially electricity, fuel and rent, are enormous.
The businessman from the north of the country regrets the 'indifference' with which the Government looks at his situation after the purchase of Alisuper network, although what sort of help he wants is not clear.
The business collapsed in 2012 owing the taxman, Social Security, suppliers, banks and workers €26 million and closed down while Nogueira cut his deal.
The final deal which Nogueira says had the ‘involvement’ of the Ministry of the Economy, was announced to the Algarve as the solution to save jobs and boost investment, all the things that politicians like Álvaro Santos Pereira loved to announce on rare visits south.
Direct financial aid is not on the government’s agenda and the introduction of the pre-insolvency Special Revitalisation Process legislation should help businesses in the position Alisuper finds itself.
José Nogueira has a problem on his hands and it was noted back in April 2012 that if the business had just gone bust owning €26 million, why would anyone want to buy it for €27 million.
There are meetings set up with bank creditors, "to try to lower interest rates," and Nogueira is preparing an Alisuper network expansion plan to cover other areas of the country, further north, in an attempt to develop a less seasonal business.
The stores in Cascais, Seixal, Oeiras and Tondela will act as a template and certainly if Nogueira today was planning to open a chain of mini-supermarkets, he would not start in the Algarve despite the Minister’s assertion that “the Algarve remains a secure investment.”
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