"Everybody believes Mondex has piled up state budget debts as a result of the diving orders in the wake of the financial crisis, but starting April, the Sibiu-based firm has been practically stifled by the high rents paid for stores in mall-type commercial spaces or commercial galleries in the country". This is how the representatives of Relco Active, the administrator of Mondex Sibiu explain the insolvency of Romania's biggest producer.
With a 100-store network, the broadest in Romania, Mondex paid over 2m euros to retail space owners every year, according to ZF's calculations. Against an 11m-euro turnover, rents account for around 20% in Mondex' sales, almost 5% above what consultants say the optimal threshold for a store should be.
Calin and Virgil Vircolacu, the company's two shareholders, are unwilling to provide more details about the company's restructuring process, stating they are in the phase where they are considering any solution. The only ones that offered details about the process were the representatives of Relco Active, the administrator appointed by the Sibiu Court of Law in Mondex's insolvency case.
"We'll close 20-30 Mondex stores, where shopping gallery or mall owners will not cut rents, and we'll shift to other retail spaces. We'll give up the first Mondex stores in a matter of days. We'll focus on Bucharest more as it's a solvent market and we'll boost exports," said Relco Active representatives.
Mondex shareholders filed for insolvency with the Sibiu Court of Law, as the company was in default, having accumulated debts of around 700,000 RON (over 166,000 euros) since April until now, not including banking loans.
"(...) From talks held with special administrator Calin Bogdan Vircolacu, the company will sell none of its assets," stated Relco Active representatives. They also say they will draw up a final list of rece
