BUSINESS

Greek electronics retailer becomes latest casualty of economic slump

ANGELIKI KOUTANTOU

TAGS: Business

Greek home appliance retailer Electroniki shut down its 45 outlets across the country on Thursday after a court ruled the company 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 less than a third of household disposable income.

Electroniki employed 450 people, who now join the nearly one in four Greeks who are out of work.

The Athens-based retailer had been loss-making since 2009, according to Reuters data. It filed for bankruptcy in March and an Athens court ruled in favour 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 towards Greek businesses - along with creditors' stance make it impossible for the company to continue its operations,” Electroniki said in a statement.

Electroniki also faced tough competition from foreign rivals, including Britain's Dixons Carphone and Media Markt, owned by Germany's Metro.

Greece imposed capital controls last June, before the country signed 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.

[Reuters]
 

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