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April bankruptcy statistics from credit reporting companies UC and Creditsafe show the worst situation in the Swedish business sector in 20 years.
READ MORE MQ has gone bankrupt
READ MORE “Dark and destructive” time for taverns and hotels
More than 25 bankrupt companies per day.
In April, 778 companies in Sweden filed for bankruptcy, which means 25 companies per day throughout April.
In Västra Götaland County, 102 companies filed for bankruptcy, an increase of 27 percent annually. The worst hit is Stockholm with 284 bankruptcies. Skåne is in second place with 116 bankruptcies initiated.
– Given what many Swedish companies are going through due to the crown crisis, we expected a sharp increase in bankruptcies in April. When we summarize the month, we see the number of bankruptcies drop to historically high levels, the highest number in April in more than 20 years, says Henrik Jacobsson, CEO of Creditsafe.
According to UC statistics, bankruptcies in the hotel and restaurant industry increased 159 percent, compared to April last year. In those industries, three and a half companies a day went bankrupt.
In retail, bankruptcies increased by 56 percent.
Many of the bankrupt companies in April are small. Three-quarters of all commercial companies have fewer than three employees. Everything from smaller wholesalers supplying restaurants to specialty retailers.
– Now five commercial companies go bankrupt per day compared to three per day last year, says Richard Damberg, a UC economist in a comment.
Two major bankruptcies in Gothenburg
Two of the country’s biggest bankruptcies took place in Gothenburg, when the classic fashion company MQ, with a turnover of more than SEK 1 billion, threw in the towel in April. The bankruptcy comprised more than 550 employees.
The fourth-place Gamlestaden governor filed for bankruptcy on April 21 and affected 37 employees. The company had struggled for a while with poor liquidity, and the owner had also suffered from illness.
– The troubled time we are in now has also made the procurement situation more difficult and stakeholders have pulled out, Styckmästarn CEO David Zackrisson says in the Fri Köpenskap newspaper.
In the UC review, statistics show that about half of the companies that went bankrupt in April had negative numbers in their most recent annual reports, which means worse pay and survival.
New wave of bankruptcies for the summer
None of the credit reporting companies see an increase in pressured companies going forward.
– The great wave of bankruptcies awaits us. Companies that have lost 70 to 80 percent of their turnover have suffered when the economy loses momentum, even if they held steady before the pandemic. I think the big wave will come during the summer or soon after if demand remains low, says Richard Damberg, an economist at UC.
Facts: Five big bankruptcies in April
1. MQ, 551 employees, Gothenburg
2. Swedish pilot services. 240 employees, Arlanda
3. Digital Inn, 116 employees, Stockholm
4. The Governor of Gamlestan, 37 employees, Gothenburg.
5. Eightmood, 30 employees, Malmö
The industries most affected in April:
1. Hotel and restaurant
2. Consulting agencies, working with corporate organizations.
3. Home and building contractors.
4. Carpentry companies
5. Taxi companies
source:
Creditsafe
A similar forecast gives Henrik Jacobsson at Creditsafe:
– Despite the number of crisis packages targeting Swedish companies, it is difficult to survive when most or all of the revenue disappears. Many small and medium-sized businesses continue to face bankruptcy and closure threats. And realizing that there is no end date for the crown crisis, while the recovery of the economy will take time, we can expect very grim bankruptcy figures in the coming months, says Henrik Jacobsson.
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