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Swedish electronics chain ONOFF bankrupt

TT/The Local/cg · 11 Jul 2011, 16:55

Published: 11 Jul 2011 16:55 GMT+02:00

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"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.

Story continues below…

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."

TT/The Local/cg (news@thelocal.se)

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Your comments about this article

17:40 July 11, 2011 by Scorch
Good. Onoff had the most incompetent employees of them all
17:50 July 11, 2011 by EP
Good riddance, hated the place.
18:26 July 11, 2011 by byke
So let's see ....

On off .... Bancrupt

Volvo moved to china

Sony Ericson doing badly

Saab ... Not made a profit in 20 years and guarenteed by Swedish tax payers

Vattenfall huge loses in Germany

H&M reported poor sales

Swedish model is doing well I see lol
18:40 July 11, 2011 by Scorch

You do realise that Onoff went bankrupt because of competition from others right?
19:04 July 11, 2011 by byke
@Scorch .... You mean competition from such famous swedish brands as media markt? Elgiganten etc LOL.

For many years, foreign companies wouldn't want to trade in Sweden as the conditions and profits / taxes were unaceptable and local monopolies had way to much power for new brands to compete with.

Now times have changed, and what we are seeing is Swedish brands failing all over the place. Is this a early sign of economic and social changes in Sweden that could be just the tip of the ice burg to a huge economic decline?
19:55 July 11, 2011 by Scorch

1. Media Markt is not swedish.

2. And competition from Komplett, Inet, Expert, Webhallen, Siba, hifiklubben, Fynda, NetonNet, ELON, Dustin, Phonehouse, Audio Video etc
20:00 July 11, 2011 by Scott McCoy
Looks like the little Swedish Bubble is about to burst.
20:47 July 11, 2011 by old git
Quick off the Mark(t?) aren't you Scorch...Byke, get off yours then maybe he can catch up....

And Scorch/ EP no one obliged you to go there, never mind shop there (Sweden is not THAT totalitarian) and think of the people losing their jobs....them working and paying taxes etc is better than you(if you are a swedish taxpayer)paying their unemåployment benefits...
20:53 July 11, 2011 by Observour
The Chinese could have bought this company and turn it round.
20:53 July 11, 2011 by Great Scott
More unemployment, this is a sign that say's people do not have any money. If Sweden's current government is not thrown out, many more will follow. Housing and living costs going through the roof, people don't have the money to spend on luxuries. This government has allowed utility bills to rise unchecked, other services that have been privatised are suffering from bad services and high prices. This government doesn't give a dam, as long as they and their fat cat stooges get full up.
21:07 July 11, 2011 by miss79
well here comes the unemployment jobless people..thanks to the govt..they really done a good job!kudos reinfeldt!
21:32 July 11, 2011 by Scorch
@old git. I rest my case

@Great Scott and miss79

I'm not a huge fan of Reinfeldt. But this is the result of the electronic chains price war that has been going on since 2006. It started when media markt established in Sweden. The financial crisis 2008 did not make thing better.
22:15 July 11, 2011 by superturbo
byke obviously have little knowledge about Swedish based companies....
22:34 July 11, 2011 by Alfred Nevada
What about Ikea? That is still a pretty good Swedish company right?
22:57 July 11, 2011 by Mib
H&M are doing fantastic. They've had a blip, but they are financially very strong. Sweden in terms of retail is in a far better shape than the UK where retailers are crashing at a fast rate.

The problem for Swedish electronic retailers is the strong Kronor making it even more cheaper to buy goods from abroad. Sweden also has a higher than average VAT rate at 25%. However, some electronic retailers are getting more competitive and for some items are very close to say a UK price and even cheaper in some cases. .
11:12 July 12, 2011 by Torsk
OnOff has been mismanaged for years. No surprise here. It has a lot to do with the aggressors from abroad: MediaMarkt (Germany) and Elgiganten (Norway), but more to do with the fact that OnOff chose not to follow the trend of discounter in what has truly become a discounter's market. MediaMarkt and Elgiganten understand this. The bloodletting of electronics chains in Sweden benefits the consumers - so rejoice for that. There will be more casualties. Equally to blame for keeping this chain on life support are the brands who supported OnOff with purchase prices which allowed it to keep investing in an obvious wrong strategy. Years of ensuring high margins to retailers allow them to cut these margins and set consumer price levels in a country with 25% vat which are lower than countries with lower vat rares. You can blame the brands and their managements for allowing this and the Swedish price war to ensue. Look to Sony, Samsung, Panasonic, etc. for part of the blame. Of course, if OnOff defaults on their payments to these suppliers, they will pay a further price dumping penalty. The country is not large enough to support so many electronics chains, and should be left over to 2 large discounters. Neighboring Norway has basically 2 - why should Sweden support 4? What was the meaning for stores in Estonia and Finland where there was no support network for expansion? This is a normal consolidation in this industry and not the result of a "bubble" about to burst. Let the retail forces in the market take over and right-size the picture.
12:20 July 12, 2011 by Great Scott

Elgiganten (Norway)

Elgiganten is Dixons UK.


@Alfred Nevada

IKEA was Swedish, Dutch.



Ask yourself why there is a price war. These companies are fighting for what little desposible money there is in Sweden.

Regarding other big Swedish companies such as H&M etc, their success is outside of Sweden, the profits never see Swedish shores.
14:30 July 12, 2011 by Scorch
@Great Scott.

Exactly. There were too many of these chains to begin with. When Media Markt entered Sweden with their very low prices the water poured over the edge on a already difficult situation.

Media Markt never had their things for sale/display on their website either which allowed them to have lower expenses even more.

Not saying thats everything is their fault. But there should always be a balance in these things.

Anyhow. Some chain had to come down eventually and I'm glad that it was onoff. I'm bying almost everything from inet.se these days anyway
01:29 July 13, 2011 by grantike
i really pity the staffs who will be layed off.onoff prices have always been too high.now we have e-handels makes it more competitive.have anyone seen prisjakt ? onoff prices are always at the bottom very high and over-staffed
13:15 July 13, 2011 by comentatir
I could see that it is bad for the Swedish economy and stuff but I really dont think that government or Reindfelt is to blame. OnOff had the wrong strategy obviously and they failed.

If you ask for more money then you should offer more. People saying their staff was not the best either so bye bye OnOff...
16:20 July 13, 2011 by Torsk
@ Great Scott: Yes, Dixon's is the hemmoraging owner of Elkjøp/Elgiganten. But it has been Elkjøp which has driven its own business from Oslo and transferring the profits back into the sick mother. ElGiganten Sweden is steered from Oslo. Ekjøp/Elgiganten/Gigantti run its logistics out of Jonkoping in Sweden.

Yes, it's unfortunate for all involved who have lost their jobs. However, the brick & mortar business and the etail business are still about "discount retail". About the only shops which are swimming upstream of CE discounters are shops like Pause, B&O, the SONY store, Bengtssons, Apple stores, etc.

OnOff tried to promote competent staff and aftersales service. This doesn't fly any more in an world with 2-3 years guarantees on product and customers who inform themselves in large part on the internet. The majority of the young customers only need the retailer today for a handful of reasons: because they need reassurance that what they decided to buy is what they needed, they want it now and do not want to wait, and if they return it, they can get a replacement in the shop in most cases. Oh, and one last thing: to make sure that its not counterfeit or fake.
03:43 July 14, 2011 by jbkulp
Does this mean that they're........Off?
12:20 July 14, 2011 by rudrachandu
when ever I got to onoff store and elgiganten store the products which are same brand are 200 to 300 krones more costly in onoff than in elgitanten. So who goes and buys in onoff if elgiganten is cheaper. I think this is one of the reasons for bankruptcy,
00:22 July 21, 2011 by wolw

You realize that would depend on which shop you visit, right?

Me and my colleague would Pwn your a$$ any day of the week. If I had the time I'd buy North Korea on your credit card. Working in a electronics store doesn't make us uneducated or unskilled, and as you can see from my writing, I'm probably better off in our second language than you are in your first (for the record I'm an educated construction engineer valuing my spare time).
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