The plan was to grow. Now Keymusic is bankrupt

It should have been the start of a growing retail chain operating in Belgium and the Netherlands, where music lovers could go for their guitar, keyboard or loudspeaker. But three years after Keymusic’s relaunch, the curtain has fallen again.

The court in Amsterdam declared bankruptcy last week about the Dutch activities that were left, at the end of last month the Belgian activities were already placed under so-called ‘judicial reorganization’ by the court in Antwerp, a kind of deferral of payment.

Jan ‘t Hoen took over Keymusic Nederland in the summer of 2019 and also acquired the shares in the Belgian branch. His idea: to increase the number of branches so that the chain would generate enough turnover to become viable.

Keymusic generated a turnover of 20.3 million euros in Belgium and the Netherlands last year, together with seventy employees and a number of franchisers (for comparison: competitor Bax had a turnover of 125 million euros in the Netherlands). That made the retail chain with its own online store not viable enough, says ‘t Hoen now.

Too early

According to Duco van Dongen, curator of the Dutch branch of Keymusic, it is still too early to identify the causes of the bankruptcy. “Several parties are interested in a restart, that’s what my focus is on in the first instance.”

According to ‘t Hoen, there are several causes. The most important is the outbreak of the corona crisis, six months after he received the keys to the case. In the first year and a half, the crisis managed to survive thanks to the deferral of taxes and the government’s wage support. “That allowed us to keep our good staff with music knowledge.”

In Belgium, however, the shops remained closed for a long time to snooping public – people were only allowed in with a purchase appointment. The web store was running well – people started making music at home en masse during corona – but according to ‘t Hoen, the margins online are so low that insufficient money was earned with it.

Also read: Music store Dirk Witte in Amsterdam became ‘unreachable’ and leaves for Utrecht

In addition, many suppliers no longer accepted orders on credit from Keymusic after the difficulties at the end of 2021. Because there was little cash coming in, it was difficult to keep sufficient stock. Orders that could be placed then took a long time to deliver due to a general crisis in the supply chain. “There was a lot of demand for musical instruments, but we often couldn’t meet that demand from our stock,” says ‘t Hoen.

Nothing right

The plan to grow to forty stores ultimately came to nothing due to all the cash flow and turnover problems. Private equity parties that were interested in financing the growth therefore dropped out, according to the now former owner.

The lockdown at the end of last year turned Keymusic’s neck down, according to ‘t Hoen. In the first instance, an attempt was made to continue in a much slimmed-down manner. The chain went from 27 own and franchise stores in Belgium and the Netherlands last year to three own stores in Belgium and three own stores in the Netherlands this summer. Some of those music stores continued under a different name, but most closed their doors permanently. The turnover of what remained under the flag of Keymusic remained too low to pay off the debts, after which ‘t Hoen eventually filed for bankruptcy itself.

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