V&D Department Stores to Fold

V&D-Store-Leidsenhage-(2)

V&D department store at Leidsenhage shopping mall, Leidschendam

In late December (2015), V&D department stores, the 62-store Dutch retail chain sought bankruptcy protection from creditors. A warm November-December led to weaker than expected holiday sales, and leaving the retailer with a glut of cold-weather items such as boots, gloves and outerwear. Sun Capital, the American investment firm which owned the chain decided not to inject the additional funds that would have been needed for the retailer to dig itself out of the situation.

With a history dating back to 1887, it was hoped that potential buyers would come forward who had an interest in purchasing the chain as an ongoing concern. This would potentially save the jobs of some 8,000 workers the chain employed. Within weeks, it was learned that there was one such interested party. Roland Kahn, the entrepreneur who owns the Dutch specialty store chain Cool Cat, began negotiations with bankrupcty executors, V&D management and banks. By mid-January, the supermarket chain Jumbo purchased the V&D eatery La Place from bankruptcy which included some 34 free standing restaurants, a catering business and agreed to operate the La Place food courts located in V&D stores (should the chain emerge from bankruptcy).

A month later, Kahn ended negotiations when an agreement could not be reached. As the sole party interested in buying the chain and continuing operations, once he walked away it sealed the chain's fate. The V&D stores officially closed on Monday 15th February 2016. Inventories are being taken and the merchandise is likely to be consolidated to larger store locations. The consolidation stores will then open back up (as clearance centers, not as official V&D stores) in order to liquidate the inventory.

One party which has been mentioned as having an interest in certain V&D assets (namely specific store locations), is the Canadian firm HBC. It owns a number of department stores chains including Hudson's Bay in Canada, Saks Fifth Avenue and Lord & Taylor in the United States, Galerie Kauthof in Germany and Metro Groep in Belgium. HBC has announced its intentions to open approximately 60 stores in the Netherlands by 2017. The name of the coming stores was not divulged, but is thought to be a lower-tier department store or off-price retail stores, similar to their Saks Off 5th chain.

So what brought V&D to its demise? Certainly one cause was having too many low-volume stores in the chain, located in smaller Dutch towns. 60 department store locations is quite a substantial number for the Netherlands. In comparison, the Dutch higher end department store chain, De Bijenkorf (owned by Selfridges), has only 10 units throughout the country. Other issues were likely a lower-than-average penetration of online sales. V&D would have been smart to offer the site in multiple languages and invest in international shipping. Limiting their potential customer base to only Dutch-speaking customers only living in the Netherlands is not smart for a mid-sized chain like V&D was.

V&D department store in Leiden, Netherlands

V&D department store in Leiden, Netherlands

 

V&D department store in Gouda, Netherlands

V&D department store in Gouda, Netherlands

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