Swedish organic and natural food pioneer Paradiset says its retail business – it operates two remaining stores in Stockholm – is to close after a refinancing package failed amid economic uncertainty caused by the coronavirus pandemic.
The grocery store business today filed for bankruptcy via the parent company Hälsoparadiset AB.
In January, Paradiset announced that it was switching focus to branded products sales through its partnership with Malmö-based health food brand owner and distributor Midsona, and would close two of its four stores.
Paradiset’s founder Johannes Cullberg commented: “It feels awful. After many years of hard work and hard lessons, we were really on the right track. Our stores have developed positively lately due to the hard work of our fantastic employees, suppliers and customers. As recently as last week, we had secured the funding needed to take the last bit of profitability next year. But the negative effects that corona had on the financial market in recent days meant that the financing could not be completed. Unfortunately, the timing couldn’t have been worse for us.”
“It feels awful. After many years of hard work and hard lessons, we were really on the right track”
For the past 18 months, the company has followed its established strategy for profitability. Two unprofitable stores have been closed and overhead costs have been significantly reduced. Financing sufficient to take the business to the break-even in early 2021 was secured and decided at the Annual General Meeting. However, the great uncertainty about the financial impact of the Corona pandemic resulted in the financing package failing at the last moment.
“We now put every effort into taking care of our employees and suppliers and to manage our stores in the best way as long as they are open. Many of us have been with it since its inception five years ago and it feels incredibly heavy that the journey is now over. In a few weeks, many years of work and a large number of people’s investments have been erased,” added Cullberg.