ATHENS (Reuters) - Greek home appliance retailer Electroniki shut down its 45 outlets nationwide on Thursday after a court ruled it was bankrupt, becoming the latest casualty of the country’s economic slump.
Greek retailers have been hit hard after six years of economic recession, and austerity in return for international bailouts, which have wiped out nearly a third of household disposable income.
The Athens-based retailer, which also faced tough competition from foreign rivals including Britain's Dixons Carphone DC.L and Media Markt, owned by Germany's Metro MEOG.DE, had been loss-making since 2009, according to Reuters data. It filed for bankruptcy in March and an Athens court ruled in favor of its request on Wednesday, court officials said.
“Despite the company’s continuous efforts, economic conditions, a further weakening in consumers’ purchasing power, capital controls - which have worsened foreign suppliers’ distrust toward Greek businesses - along with creditors’ stance make it impossible for the company to continue its operations,” Electroniki said in a statement.
Managing director Yannis Stroutsis, who owns a majority stake in the company, was forced to break off a press conference in Athens after about 30 Electroniki staff started shouting in protest at the court decision.
“(Electroniki) had accumulated losses and had made serious efforts with its creditors (to be restructured),” said Paris Tzertis, a regional manager, who has worked for the company for 25 years. “We all knew it had serious problems but we were taken aback by its bankruptcy.”
The company’s 450 employees now join the nearly one in four Greeks who are out of work.
Greece imposed capital controls last June, before signing up to a third bailout of up to 86 billion euros ($97 bln), and that put a further strain on businesses, making it difficult to secure credit from foreign suppliers and import goods.
Electroniki had agreed a new restructuring plan last year with creditors, suppliers and shareholders to tidy up its finances but developments in Greece after June 2015 resulted in a cash crunch, it said.
Retail sales in Greece have dropped by about 30 percent since 2009 and consumer prices have been falling for more than two years as wage cuts, tax hikes and record unemployment took a heavy toll on household income.
Greece’s international lenders are completing a review of its bailout program that could unlock more much-needed aid, as an influential think tank forecast this week that the country’s economic recession will deepen this year.
Editing by Susan Fenton
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