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BANKRUPTCY

Swedish electronics chain ONOFF bankrupt

Swedish home electronics chain ONOFF filed for bankruptcy on Monday, citing stiff competition, price pressure, and low profits.

Swedish electronics chain ONOFF bankrupt

“Several cost rationalisation programs have been carried out simultaneously, and we’ve had negotiations with several interested parties about selling or merging the company. Negotiations have gone far, but unfortunately haven’t lead to any finalised deal,” the firm wrote in a statement released on Monday.

ONOFF was founded in 1982, and today the company has 67 stores in Sweden, six in Estonia and one store in Finland.

“It’s very unfortunate for all ONOFF employees, but also for suppliers and customers. It’s our hope that the negotiations we conducted this spring will lead to at least some parts of ONOFF continuing to operate,” said Sten Schröder, partner and chairman of the board, in the statement.

Jessica Wallin, press officer at rival store Elgiganten, has also noted the extremely stiff competition, declining prices and small margins that have been the rule in the Swedish home electronics market for years.

“It’s not surprising to see one player disappear,” she said to news agency TT.

Wallin doesn’t believe that ONOFF’s bankruptcy will have much of an effect on Elgiganten, which is still able to turn a profit.

“We’re going to continue lowering prices, investing in customer service and making sure our customers feel secure.”

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BANKRUPTCY

Half of Swiss hotels, restaurants risk bankruptcy: employer group

Nearly half of Switzerland's restaurants and hotels risk bankruptcy within months failing financial support to weather devastating Covid-19 measures, the sector's employer group warned Sunday.

Half of Swiss hotels, restaurants risk bankruptcy: employer group
Closed restaurants face bankruptcy in Switzerland. Photo by AFP

The Swiss government is expected this week to extend the closure of bars, restaurants and leisure facilities across the country until the end of February to control stubbornly high coronavirus case and death numbers.

But industry federation GastroSuisse warned in a statement that if done  without providing significant financial support, around half of businesses in the restauration and hospitality sector could go belly-up by the end of March.

The group polled around 4,000 restaurant and hotel owners, and determined that 98 percent of them already are in urgent need of financial support.

“The very existence of many of them is threatened,” GastroSuisse president Casimir Platzer said in the statement.

While restaurants and other businesses quickly received financial support when Switzerland went into partial lockdown during the initial wave of infections, GastroSuisse has complained that support during subsequent sporadic closures has lagged.

Before the crisis, more than 80 percent of Swiss restaurants and hotels were in a good or very good position of liquidity, the study showed.

But that situation quickly deteriorated.

In October, as a second wave of infections picked up steam, the organisation cautioned that 100,000 jobs were at risk.

And during the final two months of 2020, nearly 60 percent of restaurant and hotel establishments were forced to conduct layoffs for a second time, it said.

Without government intervention, a third wave of layoffs is looming, Platzer warned.

The latest closures were to be lifted on January 22, but the government said last week it wanted to extend the deadline for a further five weeks.

GastroSuisse said the final announcement, due Wednesday, needed to be
accompanied by “immediate and uncomplicated” financial support to the sector
to avoid “disaster”.

USAM, a union that represents small and medium-sized businesses in Switzerland, called Sunday for the government not to prolong or tighten measures, warning it was an “existential question” for many of its members.

Switzerland, a country of 8.6 million people, is currently registering around 4,000 Covid-19 cases a day and had by Friday seen nearly 476,000 cases and 7,545 deaths since the start of the pandemic. 

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