After two years of adventurous growth, hot tub retailer Mspa.no has an enormous inventory and NOK 56 million in debt.
The company was Norway’s largest retailer of mobile cheap hot tubs for many years, and grew significantly during the two pandemic years. Both the founder behind the company and the enforcer of the bankruptcy estate point to skyrocketing electricity prices as decisive for the bankruptcy.
Follo and Nordre Østfold District Court opened bankruptcy on the company on 1 December after a tender was announced.
– For our part, what hit the industry hard beyond the summer and late fall was undoubtedly extreme electricity prices. Unfortunately, we had challenges with cash flow and finally had to submit a tender,” writes general manager and founder Hugo Grimsrud Reed in a text message to E24.
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Indicates the cost of electricity
The trustee, lawyer Leif Petter Madsen, points to electricity prices as the most important reason for the bankruptcy.
– After two good years in 2020 and 2021, the business built significant inventory ahead of this year’s season. Then the market collapsed completely as a result of the increase in electricity prices. Sales stopped abruptly, Madsen says, and the business caught fire with too much inventory.
– The company is unable to keep operating costs under control. Efforts to raise capital from the new owners failed. He added that it was not possible to save the company through restructuring.
According to the tender request, Madsen says the company has debt of NOK 56 million and assets of approximately NOK 30 million.
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Self-Proclaimed “Hot Tub King”
Hugo Grimsrud Reed, who owns 30 percent of the company, has been the company’s external face. After years of strong growth, Colbotn crowned himself the “Hot Tub King” in an interview. Finsavicen In 2019.
In the years 2014 to 2018, the company increased its turnover from NOK three to NOK 44 million. In the last two years, Mspa.no has generated more than NOK 100 million in revenue from the sale of inflatable hot tubs. In 2021, the company delivered a profit of over NOK 16 million.
– In addition to electricity prices, the summer weather isn’t great either, and Norwegians used their holiday budgets on holidays abroad when travel restrictions were lifted, Reid says.
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The 44-year-old is the general manager and part owner of Spaxo AS, which sells traditional hot tubs at high prices. This company is still functioning.
Trustee Leif Peter Madsen said there were no suspicious transactions between the two companies.
– He says that the company seems to have acted in an orderly manner and that the call for tender is absolutely correct.
Bankruptcy increase in November
In the third quarter of this year, the number of bankruptcies increased by 26.5 percent compared to the same period last year, according to Statistics Norway (SSB). Due to the pandemic, the number of bankruptcies in 2020 and 2021 is very low compared to 2019.
– The number of bankruptcies in the 3rd quarter was 25 percent lower than in the same quarter of 2019, Statistics Norway’s head of division Erik Fjarli pointed out in a press release.
Figures from Brønnøysund registers show that 461 bankruptcies were opened in the period from November 1 to December 9. This is slightly more than the same period in 2019 when 454 bankruptcies were opened.
There are more than 425 and 389 Norwegian businesses open for bankruptcy in 2020 and 2021 respectively.
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