The bankruptcy of Ciccolella and Florimex marks the end of yet another wholesale giants in the Netherlands. The bankrupt of the two large players in the European flower and plant trade with a turnover of millions affected businesses even outside Europe. Speaking to a former Kenyan employee for one of the two he said, “the impact has trickled down to Kenya and affected two of us”.
The collapse of Florimex a reputed multibusiness conglomerate, which employed 300 people, raised fears over their creditors among which are suppliers, who in March were forced to take huge up losses following the Ciccolella drama. Meanwhile, the Florimex bankruptcy has a long-lasting effect on other businesses down the line. FloraHolland, for example,provided a two-week line of credit via its intermediary service FloraHolland Connect and finds itself with 26,000m2 of empty building (the former headquarters of Blumex, which filed for bankruptcy in 2008), which adds to the abandoned Ciccolella offices.
There is no need to explain how the economic downturn slowly changes the VBA-Zuid business park, an area built during the auction’s boom years where bustling business was supposed to move forward, into a ghost town with empty offices. The fact is, that the auction earns more money with real estate than with flowers and perhaps it is time for FloraHolland to review its commercial strategy.
Started in 1925 in Nuremberg, Germany, Florimex expanded rapidly following the Second World War and was soon to become one of the most important players in the international flower trade during the 1980s. For years, Florimex and Zurel (founded in 1905) had been each other’s biggest competitor, engaging in a constant battle for the number one position.
Within two months, both companies have collapsed and an era is forever gone: Zurel as a division of the Ciccolella group and Florimex under the umbrella of the Florimex Group. All other divisions of the Florimex Group, Starkenburg, Baardse, Florimex Greens, Sierafor and Disva (which was only recently taken over from the bankrupt Cicccolella) have closed their doors too.
Flower wholesaler Starkenburg was traditionally strong on the English market, while Baardse was one of the biggest wholesale companies of flowers and plants in the Netherlands. Acquired by Dirbrell Brothers, the company was later integrated into the German wholesaler Florimex, also taken over by Dibrell in the 1980s. Sierafor, a leading supplier of flower bouquets for super market chains was acquired in the 1990s and added to the Florimex Group.
Florimex Greens was one of the pioneers in the trade for bouquet fillers and greens. This well-known and widely respected company was the first to announce its foreclosure a few weeks ago when suppliers in Central America refused to send new shipments after their invoices remained unpaid.
Sierafor has always been a very profitable company specialising in bouquets for German supermarkets. In autumn 2012, however, Sierafor was stuck in a fight with labour unions who opposed the fact that Dutch employees were being replaced by Polish contract workers. Eventually, the fall of Florimex also affected this once very financially healthy company, which faced severe losses on their cut tulip growing contracts with the retailing industry.
This spring, bouquet makers, such as Sierafor, signed tulip contracts with supermarket chains for prices ranging between 11 and 12 cents. Due to the cold weather at the start of the year there were not enough tulips to meet the orders and the companies were forced to purchase extra tulips at the auction clock. And on some days prices for cut tulips went sky high, rising to up to 20 cent per stem. It didn’t take a lot to realise that these million stem orders with Aldi, Lidl, Migros, Carrefour and Tesco caused mega losses on a daily basis in the first three months of this year. In March, the average tulip price at the auction was around 15 cents and even today the prices are far above the contract prices agreed suppliers and retail chains.
In 2005, the Florimex Group was taken over by Bencis, a Dutch private equity company. Last week, Bencis stopped financing the losses of the Florimex Group, after that the bank also withdrew. The company decided to file for bankruptcy on Tuesday April 9. Florimex was the last survivor of the big wholesale companies from the good old days. Maanen and van Mantel went bankrupt in the 1980s and Florimex, which was the last remaining, has now 33 years later, also closed its doors.
In 2008, the entire German wholesale department of Florimex including seventeen cash and carry stores in Germany, the Kelsterbach facility, the Herongen branch, the Vienna cash and carry market and the transport division Baardse Transport were sold to the Herongen based company Straelener Blumenhandel and Dänners. These companies are not included in the Florimex bankruptcy.