Allegro’s woes continue, Mall Group lays off a hundred people

The Czech e-commerce scene is getting really busy this week. The collective dismissal of a hundred people took place at two of the largest players on the market – apart from Heureka, which CzechCrunch was the first to report on yesterday, according to editorial sources, the same step also took place at the Mall Group, which, in addition to the Mall.cz e-shop, also includes, for example, CZC .cz

The information was subsequently confirmed by Allegro, under which the group falls. However, he does not disclose specific numbers, only stating that it was “several percent” of employees. According to the Mallu website, the entire group employs four thousand people across the region, but the figure is likely to be out of date and actually lower. Even so, it was probably more than a hundred people.

“Our main goal is to restore the health of our Czech businesses. The continuing challenging conditions on the market make it significantly more difficult for us, but we are gradually transforming Mall.cz and CZC.cz into efficient merchants on our new Allegro.cz platform.” Marcin Gruszka, Allegra’s spokesperson and communications director, reports for CzechCrunch.

“However, the pace of transformation is lagging behind our expectations, so we had to make responsible decisions. Reducing the number of employees is always the last option, but in our Czech companies we have to reduce the number of employees by several percent. We will ensure that this process is as smooth as possible for all departing employees.” continues Gruszka.

According to him, Allegro should have achieved “many successes” in recent quarters, specifically, the fact that approximately fifteen percent of the Czech population actively buys on the Czech market Allegro.cz, and the Slovak sister Allegro.sk was also recently launched.

“Despite all the challenges, we remain committed as we aim to open Allegro stores in the five Mall countries in the next two years and bring each one to profitability within four years of launch. We have earmarked up to twenty percent of future Polish EBITDA (earnings before taxes, interest and depreciation – editor’s note) to finance this exciting market expansion, and we are well on our way.” added Gruszka.

The Polish giant Allegro took Mall Group under its wing two years ago, and in addition to the aforementioned, the group also includes other Mall e-shops from Slovakia, Hungary, Croatia and the Slovenian Mimovrst. The group has been in an unfavorable economic situation for a long time, due to which the new owner had to write off billions of crowns twice from the company’s original value of over twenty billion crowns. Currently, only a quarter of the value remains.

According to official figures, the entire Mallu segment sold goods (GMV) in the amount of 17.8 billion crowns last year, which means a year-on-year decrease of 22.5 percent. Other important indicators also fell – the number of active customers by four percent, and the average order value by 19.4 percent. As part of the effort to transform the business, there was also a reduction in the number of employees last year, in the case of the entire Mallu group by 20.5 percent year-on-year.

The reported loss before taxation, interest and depreciation (EBITDA) of the entire Mall Group reached almost 1.3 billion crowns. An interesting fact is that the Czech branch of the Allegro.cz marketplace itself reported a slightly higher loss last year.