Over 1,500 people made redundant in electrical retail sector

Dramatically hurt by plummeting sales amid the financial crisis, the main retailers of electronics, electrical home appliances and IT products made more than 1,500 employees redundant in the first half of the year, with headcounts being cut because of bankruptcies and the need to restructure. According to the GfK Temax survey, the market contracted by around 40% during the January-June 2009 period.

The first to operate layoffs were Ultra Pro and Depozitul de Calculatoare. Ultra Pro Computers closed the store chain after it accumulated debts of 15m euros, with around 600 employees being left without a job, while Depozitul de Calculatoare announced it gave up 290 people.

Altex, leader of the electrical and IT retail sector, made 500 people redundant as a result of its operational restructuring, so that it currently has 1,500 employees, and on Tuesday reported a 50% turnover drop, to 83m euros. Flamingo also announced it dismissed 350 people in 2009, while its sales declined by 45%, to 44m euros.

Domo is the only retailer that has not announced any layoffs or financial results for the first half.

Romania’s durable goods market dropped by 40.4% in the first half of this year against the January-June 2008 period, to 664m euros, and by 46.8% in the second quarter, to 308m euros, reads the GfK survey.

Small electrical home appliances and telecommunications sectors shrank by 22.1% and 25.8% in the first half, while sales of large electrical home appliances had a better quarter compared with the start of the year, but figures for the this year point to a 37.1% decline.

Durable electronics fell by 42.6%, followed by the photo segment, which dropped by 43.2% in the first six months. The IT and office equipment sectors witnessed the steepest fall, by 47.2% and 51.4%, respectively.

In the second quarter, small electrical home appliances continued to decline, dropping by 27.6% from a year ago, to 16m euros.

According to GfK, the negative trend reflects the steep decline of the purchasing power of the population as a result of the falling incomes and low financial resources.