Some foreign suppliers have resorted to blackmailing retailers to get their money back

Some foreign suppliers of equipment and electronics have set very strict conditions for cooperation with Ukrainian retailers after the outbreak of a full-scale war, some of them even resorted to blackmail, UNN writes.

According to the Association of Ukrainian Retailers, Western vendors reacted very differently to the start of the large-scale invasion, some of them even withdrew from the Ukrainian market, seeing no possibility of continuing their business. Another part of them limited any operations in Ukraine, waiting for the situation to stabilize.

Vira Vitynska, CEO of the Eldorado electronics and home appliances chain, told UNN in an interview that some of their supplier partners called on February 24, 2022, and demanded to pay for the appliances that had been delivered earlier on a deferred payment basis.

And after that, when vendors began to resume operations in Ukraine, almost all of them demanded full prepayment for the supply of new goods and at least 20% more payment for the old debt (i.e., for the goods that were delivered before February 24 on a deferred payment basis).

One of our regular partners, with whom we have been working for more than ten years and whose goods we had for sale, refused to return unsold goods and decided to blackmail us by filing for bankruptcy. This is a kind of lawsuit for legal blackmail

According to her, the network was also blackmailed with bankruptcy lawsuits by another supplier, which now continues to operate in Russia and pays taxes there.

Eldorado did not specify the names of the supplier companies, but it is likely that Samsung and DeLonghi are involved.

Oleksiy Zozulya, CEO of the Foxtrot electronics and electrical network, also told UNN that at the beginning of the large-scale invasion , suppliers "froze" and put all operations on hold.

Due to the difficult market situation, the retailer had to restructure its debts to foreign suppliers for goods that were delivered before February 2022 on a cash on delivery basis.

In general, the actions of foreign suppliers of electronics and home appliances at the beginning of the full-scale invasion had a negative impact on the operation of stores in Ukraine. In particular, the "pause" in the work of vendors led to shortages of certain goods.

This complicated the already poor financial situation of companies and forced them to adapt their business models to the new conditions.

Some Ukrainian companies have had to resort to forced solutions in order to keep their business alive. For example, Eldorado, a hardware and electronics chain, initiated a pre-trial reorganization procedure to settle debts to suppliers that arose as a result of the hostilities in Ukraine.

At the end of April, the Kyiv Commercial Court approved an out-of-court rehabilitation plan, according to which Eldorado is guaranteed to repay 30% of its debt within five years, 30% is to be written off and the remaining 40% will be received by creditors after compensation for the damage caused by Russia.

A full-scale war has changed the retail market: what requirements did vendors set for companiesJul 4 2024, 12:18 PM • 105154 views

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Andriy Dligach, a Ukrainian entrepreneur and founder of the international business community Board, noted that the start of the large-scale invasion has brought many challenges to Ukrainian business. First and foremost, it is the ability to provide safe working conditions for their employees and production facilities, and therefore the business has begun to relocate.

The second problem is the destruction of logistics routes, which resulted in shortages of both components and raw materials in most areas. The third problem faced by the business was financial resources, as everything became more expensive, the situation with lending deteriorated, debts became more expensive, etc.

In addition, the departure of personnel abroad also affected the business. Some employees remained to work remotely, but some resigned.