“Children”bankrupt: how shareholders had brought to the collapse of one of the largest networks

A man with a pram standing in front of the entrance to the store. Saint-Petersburg, 2009

Photo: PhotoXPress

Claims 3 billion RUB., the arrested account and closed shops. For two years the network of “Children” because of the conflict of shareholders has passed a way from the second largest children’s retailer in Russia to bankrupt

29 September 2014 at the entrance to the building GK “the Children” was on duty, armed officers chop. A few days before that two of the three shareholders of the company — Roman Yavorsky and Alexey Ugarkin by majority vote removed the Director of the “Children” Sergei Baluja from office, and in its place put shareholder Parkina. Baluh the company was considered a “person of Nicholas, Kichiji, the third shareholder. Together with Baloha p lost top managers Dmitry Parfentiev and Oleg Simahodskiy. Now chop would not let them into the building.

“Access to working computers for them were closed, the company continued to operate, but without managers”, — told RBC former employee of the company. “Commercial Directors from all this had a heart attack,” adds another source close to the company.

Network of “Children” took the second place in the market of children’s goods after controlled by AFK “System” the Children’s world”, consisted of nearly 200 stores working under the brand “Children”, “Healthy baby”, “Mama detyam” and Orchestra. The company brought 26 billion rubles in revenues and 400 million roubles of profit in 2014, according to SPARK.

The company’s revenue in 2015 fell to 11 billion rubles., the loss amounted to more than RUB 1 billion the network is Now shrunk to 30 stores, the total amount of claims against the GK Kids” reaches 3 billion rubles., and the accounts of the company were arrested.

“The financial condition was great”

Kijiji, Jaworski and Ugarkin came in the children’s business of funeral services. The future partners met in the early 1990s., Kichiji worked as the Director of the North cemetery in St. Petersburg, and Jaworski was in the cemetery workers.

In the mid-1990s, Kijiji, Jaworski and Ugarkin began to put food in the budget of the organization. “And then they had the idea to revive the baby food, as in Soviet times. They started to produce baby food, but instead cuisine, has opened a children’s store,” — says one of past associates and Jaworski’s business, who asked to remain anonymous.

In 2000, the partners registered the company “Special service” which was owned in equal shares, and began to open the first stores under the brand “Healthy baby”.

Despite the fact that the shares were equal, the weight of the business partners initially differed. A source familiar with the Affairs of the companions, says: “the Engine was always Jaworski. Kijiji, remained on the sidelines, he never liked to be the center of attention. He did a lot as a negotiator with the authorities, but the ideas and it was only in yavirs’ke. Alex Ugarkin not worthy of attention, he always went on about, did not solve anything.”

The relationship between Yavorsky and Kichiji was initially difficult. “Kichiji at the time, threw partners, and he really was afraid, — says the source of RBC. — So, Kichiji always tightly controlled social circle Jaworski, always watching what he does, who he goes. Kichiji had even resorted to such a maneuver, for example, calls first to one partner asks where he is, and then calls the second, where is the”.

Despite mutual suspicion of partners, the company developed rapidly: in the middle of 2010 the network consisted of 80 stores in St. Petersburg and two in Moscow (the turnover was about 5 bn). At the same time “Healthy baby” began to absorb other networks: in June 2010, the Federal Antimonopoly service has approved CJSC “Special service” the purchase of ZAO “Children” businessman Igor Vernikov. At that time, the brand in Saint-Petersburg worked 24 store, 13 in Moscow. Together “Healthy baby” and “Children” took about half of the market of children’s goods of St.-Petersburg and in 2011 increased revenue to 15 billion rubles.

Momentum grew, and at the expense of budget money. In 2011 in St. Petersburg have introduced plastic cards “Children” and “Preschool”, which was credited with child benefits and other compensation. Merchandised these cards could only be certain stores that give minimum margin on socially significant children’s products. “Special service” has become one of the largest participants of the program — according to the President of the Association of professional companies in industry of children’s goods of Antonina Tsitsulina, “Children” and “Healthy kid” merchandised half of all child benefits St Petersburg. We are talking about more than 1.5 billion rubles.

In 2014, revenue grew to 26 billion rubles. “the Financial condition of the company was super. The warehouses had goods remains at 8 billion rubles, it was two years did not buy the product, ” says Nicholas Kijiji. Plan for turnover in 2015 was 28 billion rubles., We have grown, developed, banks are willing to lend to us”.

True plans were not destined. In early 2015 the company began to have serious disagreements. As he wrote, “Business Petersburg”, Kichiji accused the partners that they take credit working capital of the trading business, sending them to unprofitable agriculture.

“A project through which, in the opinion of Kijiji, funds were withdrawn, was started by the decision of all the shareholders. That is, it was just an investment that did not bring the expected profit”, — says Vladimir Mechtaiu, managing partner of advocates Bureau “FREMM”, representing the interests of Jaworski and Parkin.

The General Director of the network of stores “Healthy baby” Roman Yavorsky and St. Petersburg Governor Valentina Matviyenko at the shelf of baby food, 2009

Photo: PhotoXPress

Business-collectivization

“In 2010-2011, Jaworski pulled out of the trading business at about 400 million rubles of credit money, and took another loan of 107 million rubles, allegedly invested the funds in the farm,” says Kijiji.

“The farm”, he calls the largest vegetable farms in the Leningrad region. In the “farm” consists of two legal entities — CJSC “Vesna-Tikhvin” LLC “Agrosoyuz”. The first recorded equipment on second earth. Kijiji, Ugarkin and Jaworski became the shareholders of “Agrosoyuz” at the end of 2009. But then shareholders were former to 2014 top-managers of “Children” Sergey and Denis Baluchi, Simahodskiy and Parfentyev, and Alexander Yavorsky (contractors claim he was not a relative of the Roman Yavorsky).

Despite the fact that Roman Jaworski allegedly transferred money from the Children” agriculture, “Agrosoyuz” and “Spring-Tikhvin” has ceased to pay contractors more in 2013. “We showed them the reconstruction of the greenhouses, established a system of bioveta to harvest all year round at a lower cost of electricity than a conventional supplementary lighting”, — told RBC Sergei Komarov, Director of “Prolight Group”.

The contract with JSC “Spring-Tikhvin”, according to Komarov, was signed by 150 million rubles and 42 million rubles “Spring-Tikhvin” Komarov should still. “Pay Jaworski was at the end of 2013, then asked to wait, say, sorry, no money, and then simply ceased to take up,” he says. Now, Komarov is trying to recover the money in bankruptcy court. “Prolight Group” are unable to work, having such a size receivable, and is now in fact not valid, says Komarov.

In February 2014, due to debt of about 20 million RUB in “Agrosoyuz” turn off the gas and all the vegetables died, said the accountant, Yulia Komarova. The company had to lay off all employees — about 300 people.

Now “Spring-Tikhvin” and “Agrosoyuz” is also undergoing bankruptcy proceedings.

Where is the money?

“What kind of investment went to 500 million rubles., I do not understand,” says Kijiji. — Jaworski promised to return them, but did not, and the company was forced to pay interest at the then rate of about 40 million rubles per year. Now I realize he just brought the money”. Kijiji allegedly demanded from the Jaworski report on the money spent, has repeatedly offered to conduct the audit, but was refused.

“The idea to invest in this project has been supported by all shareholders. But after some time it turned out that the money is not enough, we need more investment, — said Jaworski through his representative. But Kichiji refused, disappointed, and funding ceased. He ordered the loan to close and the farm no longer to invest, which led to bankruptcy. To say that I personally this farm was engaged on General funds is wrong. I just thought that the project could be successful. Nobody would allow this amount to let without the consent”.

In early 2014 Jaworski suggested, Kijiji to start looking for buyers for GK “the Children”. “I said that it is wrong to sell the company, which is developing a pace. Now I think he wanted to hide the damage caused to business,” says Kijiji. The scale of the damage is estimated at 2.5 billion rubles. However, this estimate is in court, not yet confirmed: of the 20 actions in respect of withdrawal filed by Kijiji to jaworska and companies GK “the Children”, 16 were rejected, three discontinued and the two left without movement.

In September 2014, connecting the chop, Jaworski company fired all loyal Kijiji top management. “This prompted Kijiji to sell its stake in the company,” — said the lawyer Mechtaem.

In October, Kijiji concluded with Yavorsky and Parkinig a contract for the sale of 34% stake for almost $60 million contract was another prerequisite — Kijiji demanded that he had removed all guarantees on loans to banks (total amount of loans to Sberbank, Alfa-Bank and Bank “St.-Petersburg” at that time was about 4 billion rubles). Guarantors for loans made by all three co-founders, and Jaworski with Porcinum had to translate surety, Kijiji itself. In the fall of 2014, Kijiji received an advance — 641 mln.

Further participants in the contract differ. According to the lawyer Mataeva, due to the fall of the ruble cost of the package is increased in proportion to the dollar, and banks began to refuse the partners in the loan for the purchase of shares. “The issue of money can be solved, but the problem was in the fact that all three banks — Sberbank, alpha-Bank “St.-Petersburg” — refused to stop surety, Kijiji, says Mechtaem. In this situation, the idea is that the contract had to end, but Kichiji refused, the contract appears to be frozen, and Kichiji meanwhile prevented the company to obtain loans for the current activity”.

Kijiji, says that at least four banks were willing to lend the purchase of shares, but with Parkinig Yavorsky did not use it. “And take my guarantee, banks were willing, if Jaworski with Parkinig took it on myself,” he says. But they didn’t want to do that.”

Mechtaem claims that he has official answers of all the three banks, saying the refusal to take bail, Kijiji. “The guarantee on loans to rent is extremely difficult, — confirms Alexander Seliverstov, General Director and co-owner of a network “Yuterra.” — Change of shareholders for them not argument.”

Anyway, the company’s shares, Kichiji not returned, and access to borrowed money for GK “the Children” was closed: the banks refused on the grounds that it was not the consent of all three shareholders for a loan, says Mechtaem.

Now, the company didn’t have enough money not only to buy back stock in 2015 GK “the Children” began to delay payment of rent, salaries and accounts payable, and in February Jaworski and Ugarkin filed to Kichiji claim for refund in the amount of 769 million rubles, Kichiji filed a counterclaim for the recovery of the remaining 3.4 billion RUB to both claims was arrested property of the defendants.

Banks, meanwhile, demanded early repayment of loans. “Last year, the company repaid loans amounting to about 1.6 billion rubles, gave Jaworski RBC through a representative. — The money was given out of circulation, that is, instead of calculation with suppliers and pay the rent have all gone to the banks”.

The Collapse Of The “Children”

“Difficulties with suppliers began at the end of 2014,” recalls a former employee of the company. In February 2015 they began to pick up your item from store shelves.

“We began to delay the payment, in response to all questions employees (group of companies “Children” — approx. RBC) said — sue. The management of the company the relationship does not go out,” I remember in one of the suppliers who submitted the claim to arbitration.

In October 2015 started the delay of salaries of sellers, says one of the former Directors of the store. The network started to close stores. For example, the summer of 2015, the company did not pay rent in the St. Petersburg shopping centers “Rodeo Drive”, “London Mall” and “Fiolent”, owned by Fort Group. By August, the debt has reached 25 million rubles. In the end, an agreement was concluded, and stores “Children” all three rooms were closed and their place was soon taken of GK “Detsky Mir”.

In August 2015 one of the largest suppliers of the company “Concern “Kalina” has submitted the claim about bankruptcy, and it was supported by Alfa-Bank. In just the past two years, JSC “Children” and JSC “Special service” was filed almost 3 billion rubles In December 2015 at the suit of Alfa-Bank had frozen the Bank accounts of the ZAO “Children”.

Property of ZAO “Special service” arrested at the suit of Kichiji on recovery 3.4 billion rubles, but to get this money back is unlikely — collateral claimed by the banks. Claims of banks arrested also merchandise in several stores.

The remaining 30 stores as of 2016 manages JSC “Kombinat pitaniya” (according to the two interlocutors RBC, the company is also controlled by Yavorsky and Porcinum). The representative of “Plant food” explained that the company works on a Commission basis, has the right to use the trademark and equipment, but does not assume the debts GK “the Children”.

“The first three months of operation, “Plant food” everything was more or less normal in the stores even began to recover the goods, ” recalls a former employee of the GC “Children”. But then again began to delay wages, the rent there was nothing to pay, goods in the shops weren’t, we sold off the remnants at 50% discount”.

Department store of goods for children “Mother of children”, Saint-Petersburg, 2014

Photo: PhotoXPress

“He started drinking, left the family”

Antonina Tsitsulina believes that GK “the Children” ruined dismissal of experienced management. “Jaworski believed that will hire a new team, people will buy the “Children’s world” and the company will continue to work, ” she says. In the end, people found he could not”.

Kijiji think that the problem was not in management: “can You imagine what the turnover of 26 billion rubles.? How was it possible to ruin a company? — he resents. — One explanation: continued the withdrawal, I do not know for what purpose”. Another reason, Kijiji sees in the yavirs’ke: “He began to drink, left the family, finally lost moral image”.

“Kijiji wanted Jaworski to throw, told his version of the conflict of RBC familiar Jaworski. — Conversations: what Jaworski drunk and that it can not work, let’s say, will get his share. Kijiji is your son, daughter, grandson, to whom it is necessary to transfer the business. And to share the business with an alcoholic Yavorsky and worthless Porcinum, as he considered it was beneath his dignity. But Jaworski was ahead of him”.

Now, Kichiji busy litigation and negotiations with banks — he’s still a guarantor for the loans. To return them, Kichiji counts at the expense of collateral: stock from Kievskaya metro station in Moscow, stores owned by the company.

Sometimes they come back

Meanwhile, former top executives of the network “Children” Sergey and Denis Baluchi, Simahodskiy and Parfentyev, “men, Kijiji”, which almost two years ago, was not allowed to work chop — in the summer of 2015 registered company “Kids”, which began to open stores in particular where closed, and to employ former employees “Children.” The year has opened 25 stores “the Kids” — 19 in St. Petersburg and 6 in Moscow.

In the spring of 2016 in the office “babe” and Nicholas, Kichiji were searched in the criminal case about swindle in especially large size. Source RBC, close to javorska, said that former top executives are suspected of embezzling from the network “Children” of 300 million rubles. “the Dismissal of Baloha, parfentyev and Samajotsava actually due to the fact that when they started the joint-stock conflict has revealed a huge number of left on the side of money: for example, was a lease of not yet built buildings,” he says.

Secretary of the “Children” promised to pass to Sergey Baluku questions RBC, however, at the time of delivery of the notes his comment could not be obtained. Kijiji RBC, says that he has nothing to do with the network “Kids”.

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