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Electronics retailer Expert goes bankrupt

The Local · 19 Sep 2012, 10:20

Published: 19 Sep 2012 10:20 GMT+02:00

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”There are many of us who have worked very hard to turn it around, but we have been unsuccessful. It is very sad that we have had to take such a drastic measure as filing for bankruptcy," said Expert CEO Magne Solberg in a statement.

“I am the first one to regret that co-workers, franchise owners, customers, suppliers and others are being affected.”

The bankruptcy directly affects 817 employees at the company’s Swedish head office and in 73 of the company-owned stores. The Swedish franchise-owners are not included in the bankruptcy but are indirectly affected by the process.

Expert Sweden AB has 136 stores across the country, of which 73 are owned by the company and 63 by owned by franchisers. The company is one of the largest retailers on the market and has an annual turnover of 2.8 billion kronor ($428 million).

Customers who have purchased goods in the company-owned stores will also be affected by the bankruptcy.

On its web-page the company writes that they no longer will be able to accept compensation claims. Neither will customers be able to return or exchange products that they have prior to or after the bankruptcy.

Guarantees issued by the company itself are no longer valid and customers are referred to the manufacturer and whatever guarantees they have. Neither will the company cash in gift coupons and customers who want to be compensated are advised to contact the bankruptcy administrator.

Expert's customer service operations will continue to function “over a transitional period” for customers who have questions, the company writes on its web page.

Jonas Arnberg, analyst at the HUI research company, said news that another Swedish electronics retailer was facing bankruptcy wasn't especially surprising:

”This is the race to the bottom in a business where no one makes money. We have said for a very long time that this is a business with untenably harsh competition and that a number of shops will have to close.”

In July 2011, home electronics retailer ONOFF went bankrupt, citing stiff competition, price pressure, and low profits.

That yet another electronics retailer would succumb to competition was not unexpected, according to Arnberg.

However, it was far from self-evident that Expert would be next to fall.

Story continues below…

He theorized the bankruptcy might be connected to the company's business model, which relied on so many franchise owners.

“This business model is problematic in times when things move fast. It takes a lot longer to make decisions than in chains where the head office dictates conditions,” said Arnberg.

TT/The Local/rm


The Local (news@thelocal.se)

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Your comments about this article

13:30 September 19, 2012 by StockholmSam
Every time I went into an Expert, I left with the same feelings: overpriced and uninterested in my business. Their goods were always significantly more expensive than those at ElGiganten and On/Off and their employees were so overworked that it was obvious they hated their jobs. Their business model did not allow them to create the margins necessary to compete in the industry. Too much money went to overheads and so they could not drop their prices. Simple as that.
15:39 September 19, 2012 by rfmann
Well, if these chains cannot turn a profit with the ridiculously high prices they charge, then I say good riddance.
15:55 September 19, 2012 by Abe L
The downside is that it's the second Swedish electronics chain that went brankrupt in less then a year. I rather see the German Mediamarkt or other foreign companies go out of business as opposed to Swedish chains.
17:51 September 19, 2012 by star10
You cannot have a 7-11 style chain for electronics goods. Expert is like that. They have to leave. Electronics goods should be sold online. Otherwise, you should have a very cheap shop operating at a large scale so that you can afford to compete with online stores. Otherwise, just leave in time.
18:31 September 19, 2012 by Just_Kidding
When you shop electronics online: 1. you can read reviews from other users. 2. you can compare prices and take the best deal. 3. You are often offered a lower price, since you are not paying for the costs of operating a store. It is a different story with shoes or clothing or food.
00:44 September 20, 2012 by Twiceshy
Strict austerity measures? After On/Off went bankrupt, its shop area in Kista Galleria was immediately bought by Expert, even though Expert already had a shop at this Galleria.

For quite a while, Expert was running two shops there, I bet it wasn't cheap to rent two big spaces there. It doesn't seem like strict austerity measures were in place there.
07:02 September 20, 2012 by rybo1
I agree with Stockholm Sam. I rarely purchased electronic gear at Expert. However, last year I bought a 46", full HD, LCD TV and it seems now that my warranty is KAPUT.
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