The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
Retail Retail Trade, Except Of Motor Vehicles And Motorcycles Retail Sale In Non-Specialised Stores 47.11 - Retail sale in non-specialised stores with food, beverages or tobacco predominating
1,600 jobs Number of planned job losses
Announcement Date
24 January 2013
Employment effect (start)
1 January 2012
Foreseen end date
18 March 2013
Description
Orphanides, the biggest supermarket chain operator in Cyprus will put an end to its operations in March 2013, due to the accumulation of huge debts. The company is in an ongoing process of gradually releasing all its employees, a total of 1600.
More precisely, the chain owes EUR85 million to its various suppliers and about EUR150 million to banks. Initiatives to rescue the company seem to have failed. A proposal for a new company owned by 52 suppliers, to take on the management of the 16 most profitable supermarkets for 10 years, was rejected by the administrator. These huge financial problems forced the company to gradually reduce its workforce and shop network since January 2012. It is reported that until 2011, the chain had an annual turnover of EUR200 million.
Approximately 300 employees are asked to work until mid-March 2013, whereas those who work in the unprofitable supermarkets are asked to take unpaid leave until then.
This bankruptcy is expected to have a severe impact on the whole national economy - both in terms of output and employment - by threatening the survival of many small businesses in the agricultural and commercial sector. In this context, experts estimate that its overall cost could reach up to 1% of domestic GDP.
Sources
30 January 2013: Stockwatch.com.cy
24 January 2013: Phileleftheros
Citation
Eurofound (2013), Orphanides Supermarkets, Bankruptcy in Cyprus, factsheet number 74837, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/74837.
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