Top worst-hit industries by the number of bankruptcies

Top worst-hit industries in H1 by the number of bankruptcies

The economic crisis has crippled companies’ business by sales drop, tighter lending conditions, dried up cash flow and snowballing bankruptcies.

Retail trade tops the list with the most bankruptcies filed in the first half 2009, namely 2,136 cases or 20.47% of total number of failures, reports French credit insurer Coface, based on the number of cases registered at the national trade register.

Coface report says by the generic term “bankruptcy”, all bankruptcies, liquidation and winding up procedures against Romanian companies have been taken into consideration.

In the first half this year, 10,435 companies were in various stages of insolvency procedure. Compared to year-ago half, the number of companies that filed for bankruptcy climbed 40% from 1,434.

Coface said the sectors most affected by insolvency procedures were retail and wholesale trade and constructions that account for a combined 50% in total number of bankruptcies.

“Large retail groups remain the no1 threat to the collapse of small retailers who deal with a decline in number of clients. It remains to be seen whether consumers will shift to small stores, as people prefer buying less from a store near the house instead of going to a supermarket where they tend to fill the shopping cart”, said Coface.

Top worst-hit counties by the number of bankruptcies

The list of worst-hit counties by the number of insolvency procedures started against Romanian companies is dominated by Bucharest with 1,195 cases in first six months, namely 11.45% of total, according to a survey by Coface Romania.

Coming in at second is Constanta with 752 cases of insolvency registered in the period under review, accounting for 7.2% of the country’s total number of bankruptcies. Bihor takes third spot with 675 and 6.47% of total. The ten worst-hit counties account for a half of total number of companies facing insolvency in Romania.

On fourth is Brasov with 618 (5.9%), followed by Cluj – 511 (4.9%), Prahova – 444 (4.25%), Satu Mare – 407 (3.9%), Arad – 401 (3.81%), Galati – 392 cases (3.76%) and Timis – 323 cases (3.13%).

The “healthiest” counties are Teleorman and Alba with the least cases of insolvencies – 42 and 36 cases respectively.