Eldorado finally stops working in Ukraine – what will happen to the stores
11 September 07:39
The Eldorado chain of home appliance stores is finally shutting down in Ukraine. Following the decision of the Kyiv Commercial Court to open bankruptcy proceedings against Diesa LLC, all outlets are closing, "Komersant Ukrainian" reports
The remaining goods in stores and warehouses will be sold through final sales.
Reasons for the bankruptcy
The court procedure lasted two years. It was initiated in 2023 by creditors due to the company’s failure to pay debts. Now, after the court’s decision, the brand is effectively disappearing from the Ukrainian market.
Next steps
Eldorado plans to sell off the remaining goods, after which the stores will finally cease operations. The further fate of the company’s assets will depend on the course of the bankruptcy proceedings and the decisions of creditors.
Back in September 2023, Eldorado.ua officially announced the start of out-of-court reorganization and debt restructuring, having filed a lawsuit against Russia for more than UAH 1 billion in compensation for losses due to the war. The reorganization plan envisaged postponement of debt payments – both to commercial creditors and tax authorities – until compensation was received.
However, the court twice (in 2023 and 2024) canceled the approval of this plan, finding its terms too uncertain – indefinite terms, control over the rehabilitation in the hands of the CEO, formal deadlines that did not guarantee payments to creditors. The court also took into account that the plan contained unreliable financial indicators.
In addition, distributors and global electronics and home appliance brands that are creditors of Diesa LLC (Eldorado chain) opposed the out-of-court reorganization, which is a debt restructuring without entering bankruptcy proceedings.
The court has now appointed Ivan Bandura as the insolvency officer in the case. As a result, an independent person, not the company’s management, will oversee the bankruptcy procedure. Creditors have 30 days from the date of the official publication of the decision to submit their claims against the debtor.
In the coming weeks, the court is expected to release more details about the case, including the company’s property, creditors’ claims and possible insolvency officers. There are already speculations in the business community that this is only the first step towards a large-scale restructuring of the network or the sale of assets.
It is worth noting that the bankruptcy procedure opens up a real financial risk for creditors: there are no guarantees when or if they will receive their money. Given the international lawsuit against Russia and the decline in sales, debt recovery looks extremely uncertain.
This case can be seen as a significant marker of the impact of the war on the retail sector, where loss of stability, reduction of networks and falling production figures often lead to bankruptcy of even the largest players.
Read also: The number of bankruptcy cases in Ukraine has increased
What the Eldorado network lost during the war
As of the end of 2022, the number of stores in the chain had almost halved.
The company’s revenue dropped from UAH 14.2 billion in 2021 to UAH 7.3 billion in 2022, and in the first half of 2023 it was just over UAH 1 billion. The staff has been reduced by more than 40% (from the pre-war 3,518 employees).
In March 2024, the court ordered the Russian Federation to pay the chain UAH 141.4 million in compensation for damages and lost profits.
How Eldorado’s bankruptcy will affect the market and consumers
The declaration of bankruptcy of one of the oldest and most well-known electronics chains may have consequences for
- creditors, who may lose some of their funds or be forced to defend their interests through arbitration;
- suppliers, who may not receive payments or be forced to renegotiate their terms of work with other retailers;
- customers who have warranty obligations or are waiting for online orders to be fulfilled;
- employees, as the company may reduce staff or close some outlets.
Context: the state of retail in Ukraine
The consumer electronics market in Ukraine is in crisis. According to the State Statistics Service and industry research, in 2023-2024, there was a decline in demand for large appliances, TVs, refrigerators, and other expensive goods. Many retailers exited the market, switched to online models, or optimized their store networks.
The Eldorado chain, which has a strong offline presence, has not been able to fully adapt to the changes and competition from Rozetka, Comfy and other digital players.
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Eldorado is one of the largest home appliance and electronics retail chains in Ukraine, operating in the market for over 20 years. The head office is located in Kyiv. The main areas of activity include retail sales of large household appliances (refrigerators, washing machines), small household appliances, mobile phones, computers, TVs, accessories and related products.
At its peak, Eldorado had hundreds of stores across Ukraine and an extensive logistics network. The company also actively developed online sales through the eldorado.ua website, combining the classic retail model with digital tools.
The chain is part of a holding associated with businessmen who previously owned the Foxtrot chain. In the context of the full-scale war, the company faced a drop in demand, logistical difficulties and competition from online retailers.
