French domestic electrical appliance retailer Darty said Thursday it plans to close its 43 outlets in Spain in June and lay off its workforce of 650 at a cost of 30 million euros.
“In Spain we have been growing market share and building our service credentials but we remain sub-scale,” Darty Chairman Alan Parker said in a statement. “Significantly improving our position would be a long and potentially expensive journey with no guarantee of success in what we expect will remain a very difficult market.
“Following a thorough process, the board has concluded that a managed closure provides the most certain outcome,” Parker added.
Darty recently completed the closure of its operations in Italy as part of its plans to focus its business on France, the Netherlands and Belgium.
Darty estimated that it would make a loss of 16 million euros in the year to April, 2013 on revenues of about 120 million. Total losses of Darty’s Spanish unit since the acquisition in 2007 of the former Menaje del Hogar amount to 78 million euros.
Sales of electrical appliances in Spain have fallen for the past 34 months as the country slipped back into recession for the second time in four years, according to the industry association Anfel. Revenues of the sector last year declined 13.8 percent and have now fallen for the past six years.