As Ceconomy (the owner of the MediaMarkt and Saturn chains) was forced to close its stores for a while due to the corona crisis, it suffered huge quarterly losses and had to ask for state aid in Germany.
Despite strong start
Ceconomy saw its turnover drop 7.7 % to 4.6 billion euros in the first quarter, despite a strong start of the year. January and February had a decent growth in sales, but the corona crisis hit hard from the beginning of March. At the end of that month, almost all of the company’s stores were forcibly closed.
The lockdown in many European markets did mean a huge boost for online sales, with pure e-commerce sales almost doubling in March (+ 98 %). For the full quarter, online turnover went up 23 % to 859 million euros, but that was not enough to compensate for the closed physical stores.
The crisis did push Ceconomy from a profit of 26 million euros last year into a loss of 131 million euros. The company had already made clear it suffered badly from the covid crisis when it had to apply for billions in state aid at the end of March, being one of the first major German companies to do so.
The application was granted by German state bank KfW (Kreditanstalt für Wiederaufbau), which granted a loan of 1.7 billion euros on the condition that Ceconomy stopped paying a dividend while the loan was still active. An additional 340 million was borrowed from other creditors.
The company has also cut back on marketing and staff: the total workforce is now 6 % smaller than a year ago. Meanwhile, Ceconomy’s management has decided to forego a number of bonuses during this financial year.