Chick'n'Chips fast-food company has closed its three outlets in Slovakia due to unbearable financial problems, depriving McDonald's Slovakia restaurants of one of their few domestic competitors.
"We had to take this step because of the generally bad economic situation in Slovakia," said Marta Rejholcová, the company's legal representative. Rejholcová explained that the company had been granted a 32 million Sk ($880,000) bank loan to start the business.
"With respect to the continuous rise in interest rates and the gradually increasing prices of input materials, we couldn't make anything out of the company expansion," Rejholcová said, adding that the company's management had first started considering the option of closing the business one year ago. "It was impossible to pass these increasing financial costs on to the prices of our products, because they would have become dead stock," she added.
Fast-food providers claim that food is an extremely price-sensitive commodity, especially with regard to the flip-flopping purchasing power of Slovak people.
Chick'n'Chips was established in 1995 with 100% Slovak capital. In 1996 the company opened its first restaurant in the northern Slovak town of Žilina, and in 1997 in Bratislava. The last outlet was opened early this year on the motorway near Trenčín in western Slovakia. The turnover of the three restaurants amounted 46 million Sk ($1.28 million) in 1998.
The company is currently selling its technology facilities and its know-how on management of fast food outlets focused on poultry products. According to Rejholcová, the management's initial idea was to build up a network of ten restaurants around Slovakia within five years. "Closing down the restaurants is not the end of our company," she said. "We have a strong team of people skilled in economic management and advising, so we will continue with our activities in these fields," Rejholcová concluded.
19. Oct 1998 at 0:00 | Ivan Remiaš