Malta-backed ‘Italian Ikea’ goes bankrupt, 1,800 jobs lost

A Maltese company held by undisclosed owners in a nominee firm, Shernon, has been declared bankrupt by a Milanese tribunal in Italy, and with it, the hypermarket chain Mercatone Uno.

The chain’s collapse has led to the loss of 1,800 jobs in Italy, after a long period of crisis for the retail company over the course of 2018, when it was sold to two different groups.

Its core, furniture business was held by Shernon Holding, which also has a related tax-resident company by the same name, in Malta.

The company’s collapse comes in the wake of spiralling debts of €90 million, with losses of around €5-6 million each month – a situation that led the Milanese tribunal to declare bankruptcy in a bid to stop the financial haemorrhage from worsening.

The company at this stage has €26 million in stock that will have to be preserved to pay back its 500 suppliers, whose representative William Beozzo says leaves 10,000 dependent jobs in the balance, and a further €250 million in unpaid credit.

The company previously employed a total of 3,700, but it suffered losses in the wake of a massive economic recession that led to the firm being taken under controllership in 2015. The chain’s 79 outlets were put up for sale for €280 million soon after, and then knocked down to €220 million, with no offers coming forward.

Then in January 2017, Shernon Holding and its associated Maltese company Star Alliance Limited, controlled by Swiss-Italian Valdero Rigoni and Michael Tahlman of Liechtenstein, acquired 55 of the chain’s outlets as well as its Imola headquarters and its logistics hub in Bologna, together with its 1,885 employees.

At the time, Rigoni had vowed to double sales by 2022 to €500 million, on the back of a €25 million investment to revitalise the brand – a made-in-Italy furniture chain which was still the third most sold brand in the country. Rigoni wanted to refit all 55 stores and adapt them into modern retail experiences with cooking masterclasses and DIY courses.

Rigoni said Shernon’s ownership by the Maltese firm Star Alliance was necessary to launch Mercatone beyond Italian markets, to turn it into the ‘Italian Ikea’.

Italian deputy prime minister Luigi di Maio has expressed his concern at the closure of the Mercatone chain across Italy. “We will have to first safeguard the jobs of Mercatone Uno employees,” he said.

His Lega counterpart and minister Matteo Salvini said he would “personally meet unions, workers and suppliers... I cannot allow employees to lose their homes. Even on this matter, the new Europe to come into shape tomorrow will have to show its strength in protecting jobs,” he said, referring to the European elections results which his party won.