With the philosophy of being “Fair and good” Mercadería SAS was born Fair & Good, one of the discounters in the country, a competitor of Ara and D1, which managed to position itself at the national level as the second discount supermarket chain in Colombia. But little by little it was losing market share and finished third, with 18.2% share within the discounter and retail sector, after Ara unseated it, according to Euromonitor.
It was born years ago, exactly in 2015. It was founded by Michel Olmi, who is also listed as the creator of D1 stores; that is to say, he risked it for the idea and also for the competition. His business ally was the Santodomingo Group. The business model was not a Colombian “headbutt”, but rather an import: Justo&Bueno is inspired by a German line of business called Hard Discounter and which translates as “Hard Discount”.
And yes, pure and simple discount, as they say more exactly in Colombia, was what they were looking for with the creation of these supermarket chains that, in essence, were simulating perhaps the most successful business model in the country: neighborhood stores.
The first store was in the Restrepo neighborhood of Bogotá, in February 2016. But by October of that same year, they already had 175 stores and 1,459 employees, with a projected sales of $35,000 million: quite a success. Its secrets: working hand in hand with small suppliers and leasing all its premises. Colombian history can confirm it: everyone has a Justo&Bueno “just around the corner”.
But, everything that goes up, comes down at some point, and in Justo&Bueno it happened that that colloquial formula was applied to the letter. Here it comes, what the writers of a novel call “the conflict”; because so far it’s a fairy tale.
The drama of history begins with the storm of the pandemic. Justo&Bueno argued that this phenomenon had a considerable impact on its finances. So the supermarket chain went from selling $3.2 billion annually to having debts of more than $1.2 billion. As a consequence of this, Justo&Bueno received a liquidation order from the Superintendence of Companies, which is still in force. In this context, the “villains” appear. Well, Russian, American and even Chinese tales arrived promising to save Justo&Bueno.
The first antagonist in this story was a Russian fund that was never heard from again; the next was the American fund MGM Innova Capital, chaired by Marco Monroy, which ended up placing US$4.5 million for Justo&Bueno. The latter has a breaking point and is that they appear as Merchandise partners, but in Panama, according to research carried out by LR. Then came the promising Chinese fund called JFC, which stood for Joining Futures Capital International Limited, but which was ultimately the acronym for the Colombian, Jhon Jairo Flores Capital. He had stated that he was going to buy the company, but in the end this turned out to be just “a tall tale”, because the promised money never arrived.
Among the reasons why Justo&Bueno reached this financial breaking point is mainly due to mismanagement. Giraldo explained to LR that even with the effects that the pandemic was having on the resources of the supermarket chain, the administration at that time decided to open more stores in Colombia and also venture into international markets such as those of Panama. Reason that was leading Justo&Bueno to a situation of non-payment with its suppliers and later with the employees.
A new investor arrived
The story continues with Justo&Bueno receiving a new investor in the last week. This is the Lobbying&Consulting firm, which is chaired by Alfonso Giraldo Castro, a Colombian businessman who has figured in several of the country’s large companies (see below). Giraldo informed LR that Lobbying&Consulting together with the global firm Deloitte are looking for fresh money to save Justo&bueno. The proposal consists of injecting more or less US$40 million to cover administrative expenses and stabilize the operation. They are currently waiting for permission from Supersociedades.
This is the profile of the new investor
One of the new investors that will seek to save Justo&Bueno is the firm Lobbying&Consulting, chaired by Mr. Alfonso Giraldo Castro. The consultant has worked with several multinationals that operate in Colombia and in the region; one of the many are 3M, Dupont, HEL, Wester Union; Cobra Group; and Codere. For his part, Giraldo has been a member of several boards of directors of large companies in the country such as Hidroituango, MG12; and he was for more than 14 years associated with Augusto López Valencia, former president of Bavaria and top figure of the Santodomingo Group.