Adam Parnes, the chief executive of Oscar Gruss Israel, convened the company's employees yesterday to make an important announcement. In this unhappy clime, some probably feared the sack. But he took them by surprise.
Oscar Gruss had signed a clearing contract with a far larger brokerage ¿ Jefferies Group, he told the worker clustering about him.
Even happier was the news that Oscar Gruss's shareholders, all descendents of the company's founders Oscar and Emanuel Gruss, had granted Jefferies an option, exercisable until year-end, to acquire full control over the brokerage.
Why should that be good news? Because it gives the employees more hope of keeping their jobs, or rather, having jobs to keep.
Nobody is talking about the price, if only because Oscar Gruss is in such sad condition that it's probably too embarrassing.
Meanwhile, Jefferies is carrying out due diligence to avoid encountering nasty surprises. Chances are the check won't turn up anything, on the grounds that the brokerages' negotiations were properly transparent. These are people for whom reputation is everything, and anyway, due diligence checks are routine.
If Jefferies buys Oscar Gruss, its workers really can relax. And if not? It's over, after 83 years.
Like many of its peers, mainly the small ones, Oscar Gruss has seen its business base shrink and, concurrently, its revenues. Its Israeli representation, established in the sixties, has actually become one of its main sources of income.
One of the factors behind the Tel Aviv office's rapid growth was its manager, Eddy Shalev. But he left five years ago to set up his own brokerage, which cooperates with CIBC Oppenheimer. His departure and competition did Oscar Gruss no favors.
Roughly at about the same time came a generational shift among Oscar Gruss's shareholders. Also, the managers of the company today had come from the real estate sector, hence they may have found the dynamism of the times rather challenging.
Those are problems specific to Oscar Gruss, which of course also suffered from the challenges facing the whole sector.
But why now? What could bring such a veteran company to its knees now? First and foremost, Oscar Gruss's implosion shows just how bad the general crisis pervading the United States really is, with companies collapsing left right and center, and shifting to the red.
Also, Oscar Gruss's whole raison d'etre was to leap onto business opportunities. The problem with rapid growth is the seeds of destruction that it sows in a downswing. The faster the retreat, the smaller the company's ability to adjust spending quickly enough to the leaner times ¿ which can in itself lead to breakdown.
Parnes begs to differ. "Even if Jefferies does not buy Oscar Gruss, Oscar Gruss will not be closing," he stated for the record. "In any scenario Oscar Gruss comes out stronger."