Estonia, Latvia, Markets and Companies, Retail

The sudden deterioration of the economic environment of Latvia has brought losses to Selver Latvia that means that the company has been unable to meet the expectations it had at the time the decision to expand to the Latvian market was made. The loss made by Selver Latvia in 2007 was two million kroons, and the loss in 2008 amounted 18 million kroons. The net loss made by the company this year might be as high as 100 million kroons (6.4 million euros).

Selver Latvia owns six operating stores, the first of which was opened in December 2008. A-Selver intends to freeze the activities of its subsidiary Selver Latvia by closing all six stores in Latvia and laying off 220 employees.

Detailed information about the further action plan of Selver Latvia and the one-off costs associated with the freezing process will be published through the stock exchange system this year.

AS A-Selver council chairman Andres Järving says that the decision for the Selver supermarket chain to leave Latvia is difficult but considering current circumstances, inevitable, Postimees Online/LETA reports.

“Selver decided to expand to Latvia at a time when the depth of the crisis that has taken place by now could not be predicted by anyone,” said Järving.

“We took risks into consideration but figuratively speaking, force majeure cannot be fought against.”

“It is too early to say how we would behave in Latvia further and what is going to happen, but it is clear that we will close all 6 Latvian Selver stores in the next couple of weeks and will try to find the best solution for the company and the shareholders.”

“We will focus on the home market which we know well: next spring we will open one more Selver in Estonia, in Haapsalu. Selver’s development in Estonia continues,” said Järving.