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In March, the number of bankruptcies increased dramatically among small businesses. Then, at the start of the pandemic, it could be seen that among the worst-hit industries were restaurants, which later saw an increase in bankruptcies of just over 90 percent, according to credit reporting company Bisnode.
In the hospitality industry, guests were also absent from hotels, between weeks 12-14, bankruptcies increased from 29 to 117 companies. In Sweden, bankruptcies increased by 42 percent.
But as of June, the Swedish curve stabilized, with 585 joint-stock companies in bankruptcy, one company less than in June last year. In October, the numbers are stable and bankruptcies appear to be decreasing for most companies.
Still, small businesses are, or companies with a maximum of ten employees, for the largest number of bankruptcies. They make up 80 percent of all companies that have filed for bankruptcy, and the latest figures are 4,405 bankruptcies. A total of 5,529, according to Bisnode.
– It is probably the case that small businesses account for up to 93 percent of bankruptcies, says Henrik Hargéus, manager of risk and credit products at Bisnode.
The fashion company MQ is one of the chains that has gone bankrupt.
Photo: Josefine Stenersen
Among large or medium-sized companies, 425 have gone bankrupt this year, including fashion companies and chains such as MQ and Dea Axelsson. But larger companies in general have not been as affected, says Henrik Hargéus.
– Larger companies often have greater opportunities to reduce their costs and have also been able to use different support packages to a greater extent than individual entrepreneurs.
The credit reporting company UC statistics for the month of October show that bankruptcies are down 36 percent compared to October last year. During the January-October 2020 period, bankruptcies in Sweden will decrease by two percent compared to the same period in 2019.
Although bankruptcies have now stabilized, development looks different across industries, says Henrik Hargéus.
– Especially in industries where people meet. Then we talk, for example, of sporting and cultural events. There, specific support packages determine whether the industries survive.
Henrik Hargéus, Product Manager for risk and credit at the credit information company Bisnode.
– The transportation industry as a taxi, airline and bus company remains complicated as you continue to work from home. They are extremely vulnerable, but mainly when it comes to passenger transport. Because at the same time, there are many who buy online now and someone needs to transport the packages.
This year is more than 8,000 employees affected by bankruptcies, last year the figure was just under 3,000. At the same time, more and more people are choosing to start their own.
– Those who have lost their jobs are probably trying to think of something else, says Henrik Hargéus.
Chief business economist Daniel Wiberg believes bankruptcies may accelerate again.
– Greater uncertainty may arise as a result of tighter restrictions in the rest of the world and other major events such as Brexit. The latest in Sweden, with renewed recommendations to work from home and refrain from visiting shops and malls, has a significant and immediate impact on the profitability of many smaller companies.
Photo: Janerik Henriksson / TT
Daniel Wiberg believes that, without a doubt, it is the smaller companies that will also be the most affected in the future.
– They often have small margins and reduced demand directly affects the livelihood of the employer and employees. The opportunity to lay off employees has given some financial breathing space. Despite this, many entrepreneurs will now have to consider laying off staff or otherwise downsizing their operations, says Daniel Wiberg.
