Bitter pill for Dr. Migros: The retailer suffers a flop with his ambitions to become a doctor

The beginning was modest. When Migros joined Medbase in 2010, the healthcare company had just seven locations and approximately 150 employees. The Medbase Group is now the largest provider of basic medical care in Switzerland. It employs around 4,000 people, operates 69 health centres, four radiology centres, 58 pharmacies and 42 dental centers across Switzerland – and brings good profits to Migros’ coffers.

Migros does not provide exact figures; the retail group only emphasizes that that “Medbase is profitable in all business areas”. Experts speak to CH Media of profits in the double-digit million range. An indication of the satisfactory business development is that Medbase has emerged from the recent Migros turbulence unscathed.

Migros President Ursula Nold and Migros CEO Mario Irminger continue to name the ‘Health and Wellbeing’ area, as it is officially known, as one of the group’s four strategic business areas. And this despite the fact that the former promoter, former Migros boss and health turbo Fabrice Zumbrunnen, has been gone for almost a year.

A second indication of the satisfaction of Migros management with Medbase is the leader of the healthcare company: Co-founder Marcel Napierala is still in charge after all these Migros years.

Flooring workforce losses are usually good indicators of problems, as evidenced by the large regional cooperative Migros Aare, which spans Aargau, Bern and Solothurn. Following the forced departure of cooperative boss Anton Gäumann in November 2021, a large part of the management was replaced here. The last thing to be replaced is the president.

The entire board of directors of the Neuchâtel-Freiburg cooperative was also replaced following the exhausting power struggle between Migros headquarters and long-time regional president Damien Piller.

Most of the Sparrow Ventures crew is also gone. Last October, Migros shut down the innovation vehicle it established in 2018. It consisted of a small group of about forty people who spoke mainly English startup jargon, who liked to travel to Google in Silicon Valley, as Migros veterans like to complain, and who did not want to participate in the prestigious sales environment at all. «Finally!” This was the spontaneous reaction of a long-time Migros manager to Neo-Migros boss Mario Irmiger’s decision to close Sparrow. And he was far from the only one with this reaction.

The adventure with the Sparrow department is now costing Migros dearly. Their involvement in Bestsmile in particular puts pressure on the books – and is responsible for part of the 500 million francs value adjustments that Migros had to announce at the beginning of February. This is evident from research by CH Media. Migros will neither confirm nor deny this. According to Migros spokesperson Marcel Schlatter, the write-offs of 500 million are as follows:

It is entirely plausible that some of the unspecified R125 million will fall to Bestsmile. In any case, Migros is now phasing out the Bestsmile activities. 36 of the 330 employees will lose their jobs, a quarter of the current 36 branches will be closed, especially those in Solothurn, Thun, Biel, Morges, Yverdon, Bellinzona, Nyon, Schaffhausen and Zürich Enge.

Bestsmile was founded in 2018 by Ertan Wittwer, Philip Magoulas and Marcel Kubli. Initially, the product offered transparent braces intended to correct tooth alignment within a few months; Later, wafer-thin ceramic trays for teeth were added. Migros entered the business at the end of 2019 and fully took over the company in the spring of 2022. In return, the three founders left. Only Ertan Wittwer, a star in the local startup scene, who recently founded the Zurich company Care, a self-optimization company based on blood values, together with his colleague Kubli, remained on board as a board member until the summer of 2023. .

Sparrow then justified his investment by saying that Bestsmile promised orthodontic treatment at a very competitive price. And secondly, because they were ‘completely convinced by the founders’, by their drive, ambition and experience. “We are happy to be on board as partners.”

Meanwhile, luck has clouded, and not just because the start-up team at Migros has left. Apparently incorrect numbers were displayed when purchasing Bestsmile. Insiders say they got carried away. Migros spokesperson Schlatter said: “As part of the review of the Bestsmile 2021 annual report, inconsistencies were discovered in the fall of 2023.” That means the annual report, for which the founding trio was still responsible.

Clarifications about these events were made “immediately after they were announced,” says Schlatter. He does not want to provide any further information at this time – including whether Migros now wants to take legal action against those responsible for the ‘inconsistencies’.

The Bestsmile case shows that not everything that promises health is healthy for business. Migros has now also halted the multi-million expansion plans of Wepractice, another Sparrow project. The initially promoted offer of co-working space for psychotherapists will be canceled in May 2024. Wijpraktijk, on the other hand, continues to exist and is now part of the Medbase Group. Psychotherapy is ultimately an essential pillar of integrated care, says Migros spokesperson Schlatter. However, Wepractice is no longer a network for independent psychologists, but for employed therapists.

Wijpraktijk does not stand alone. Over the Migros years, a number of other companies have been added to Medbase, such as the Santémed health centers, previously owned by the Swica health insurer, the dental center, the Permanence at Zurich train station, several pharmacies and, about a year ago, Switzerland for 360 million francs -Business of the online pharmacy Zur Rose with its wholesale medicine, online offers and a logistics base.

Medbase now comprises the majority of the retail group’s healthcare offering. Dr. But Migros is probably far from finished. (aargauerzeitung.ch)