Czech bookseller Levné knihy has filed for insolvency proceedings in Prague Municipal Court, citing significant disruption from COVID-19 lockdowns and subsequent economic headwinds.
According to the insolvency filing, the company was forced to rely on its online store during repeated closures mandated by pandemic-era restrictions.
The company stated that conditions deteriorated further in February 2022 with the outbreak of the war in Ukraine, leading to sharply rising inflation, increased energy and rental costs, and higher wage demands from employees.
A decline in retail sales of non-food goods also contributed to the financial strain. “To bridge these difficult times, the company used its financial reserves. Although, the desired stability could not be achieved in the long term,” the firm said in its filing.
Levné knihy ultimately determined that continuing operations was unsustainable, prompting the insolvency proceedings.
As of the filing, the company reports debts of 103.3 million Czech koruna to unsecured creditors and 29.8 million Czech koruna to its secured creditor, Česká spořitelna.
A secured creditor holds a claim covered by assets belonging to the debtor, while an unsecured creditor does not have a specific asset to cover its debt.
Maloobchodní prodej není příznivý
The company has not yet been able to fully assess the value of its assets, but estimates larger assets at approximately 23.4 million Czech koruna. It also reports receivables of 3.1 million Czech koruna, over one million Czech koruna in bank accounts, 352,900 Czech koruna in cash on hand, and 10.14 million Czech koruna in deposits related to store leases.
Currently operating 49 stores across the country in addition to its online store, Levné knihy does not anticipate being able to sustain its business.
