A major food retailer went bankrupt in the Czech Republic. Ends wildly, cuts off gigantic debts

We didn’t remember anything like this in the Czech Republic for a long time. It ends with a large, well-established retail chain that has a large group of customers. It is a network of supermarkets in Iceland and headquartered in the United Kingdom. However, in the Czech Republic it has expanded significantly in recent years, gradually opening 11 branches and trying to convince customers that frozen foods can be of high quality.

It was closing gradually

But it is now clear that this will not be a success story. It was clear a few weeks ago that something was going on. Iceland closed many of its stores without explanation, stopped adding merchandise to others, and customers lost the opportunity to shop at the popular online store. At that time, the company did not want to officially admit that it was about to expire. Instead, I talked about some form of restructuring.

If this is considered at all, it is clearly impossible, because Iceland is now officially ending, and not in a very nice way. The parent company ICL Czech has filed for insolvency against itself. This means that she is not obligated to cover her obligations and that her British mother does not.

Reasons for failure

The company reduced its debt by a total of 38.4 million kroner. It has the largest number in the Czech Social Security Administration and the Tax Office in Prague. Apparently, it has not recently paid Social Security or taxes to its employees. This is not exactly a proof of business model. In the case of such an established company, which also has a big name abroad, a more cultural departure can be expected.

The company itself cites the pandemic and then Great Britain’s exit from the European Union as reasons for its failure, which made logistics and delivery of goods exponentially more difficult. But Marks and Spencer, who also sell groceries, were able to handle this. So perhaps another reason is that Iceland’s products have never won the hearts of Czech customers.

Photo: shutterstock