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 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.
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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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