Nature Point Health Chain Closes All Stores Amid $4 Million Debt Crisis
The Israeli health and natural products retail chain, Nature Point, has shut down all nine of its branches across the country due to severe financial difficulties and debts totaling NIS 14 million (approximately $4 million USD).
The company, established 12 years ago and specializing in natural products, supplements, vitamins, and organic food, filed an urgent request with the Tel Aviv District Court on Monday for proceedings to be opened, a trustee to be appointed, and proceedings to be stayed. This is to allow for the formulation and approval of a creditors' arrangement.
The request was filed by three companies comprising the group, led by the main entity, "Nature Point M.S.M.". The chain, which employs 38 people, has been operating since 2014, with both physical stores and an online presence. At its peak, it included 11 branches and significant digital operations.
According to the filing, one of the two shareholders, Yonatan Frank, has been in continuous active reserve duty for nearly three years since the start of the "Swords of Iron" war, including currently serving in Gaza. The company claims that Frank's prolonged absence, the reserve duty of other key personnel, the general security and economic situation in Israel, intense business competition, and fixed operating costs that did not decrease with falling revenues led to losses.
Despite the shareholders, Frank and Bar Kaplan, injecting NIS 4.8 million of private funds and loans over the past two years, a recent economic assessment prompted the immediate closure of stores on the eve of Rosh Hashanah. The company estimates its assets available for distribution at NIS 8 million, against total debts of NIS 14 million.
The proposed arrangement aims to repay secured creditors 100% of their debt, personal guarantee creditors 62%, and ordinary unsecured creditors 35%. The company also noted that several competitors have expressed interest in acquiring the chain, and negotiations should be expedited. The filing also revealed that the company cannot meet August payroll for its 38 employees, with 32 employees having not received wages for previous months.
Nature Point's legal representative, Dr. Adv. Omer Nirhod, stated that the company was a pioneer in Israel's natural product stores and faced financial hardship due to the ongoing crisis, including the COVID-19 pandemic's impact in 2020-2021 and the subsequent emergency situation. He added that financial institutions did not provide the necessary support, leading to harm to employees, consumers, and shareholders. He asserted that the company's management acted responsibly by seeking a creditors' arrangement that would maximize returns for creditors.
