The Flamingo International IT&C retail group is considering lowering its capital and eliminating certain product lines from its portfolio, as extreme measures in case the market drops above expectations. “We are preparing severe measures, including a cut in the company’s capital and foregoing some product lines which are slowing stock turnover. What we knew from the previous years experience is no longer valid as a business model. However, even if the market bounces back, it will no longer reach the level of the past years,” the company’s Chief Executive Officer, Jiri Rizek, told Business Standard. Laptops and Liquid Crystal Displays (LCD) were the only product lines to register growth for Flamingo, on a market impacted by the economic crisis. “We are living in a difficult market in terms of business environment. The worst hit segment is that of household appliances. On electronics, only LCD’s are doing better. The IT sector is pushed up by high demand on the laptop segment,” said Rizek. According to Rizek, Flamingo sold in 2008 twice as many laptops than in the previous year. However, the decline in prices led to a mere 70 percent growth rate in sales revenues. Regarding desktop systems, the company sold half of the 2007 volume, while the value amounted to only 40 percent of that registered two years ago. “I believe the IT retail market evolved to some €350 million in 2008, and I consider this value to be constant in 2009. However, we could see a slight improvement in terms of value at the end of the year, because we still see many new connections to the internet, but it depends on how much the growth rate will slow in the first quarter,” Rizek added. Flamingo’s CEO estimates that the IT&C retail market will register a 5-10 percent drop in this year’s first half, and the first signs of stabilization will become visible around Easter. (S.N.)
