The Mall Group, which was bought by the Polish company Allegro two years ago, is struggling. Bad economic results have now spilled over into mass layoffs. Hospodářské noviny reported that around 120 people lost their jobs. At the same time, already during the whole of last year after the merger of Allegra and Mallu, the personnel ranks of the Czech e-shop were slimmed down.
Despite the fact that Czech e-shops returned to growth at the end of last year and at the beginning of this year, it does not look like the situation in the online shopping industry is completely stable. For example, the Mall Group, which includes e-shops Mall.cz and CZC and the carrier WeDo, is facing significant difficulties. The originally Czech group has had a painful relationship with the Polish Allegro, an internet marketplace on whose website Mall and CZC sell their products. Their sales are thus naturally falling, but Allegru’s turnover is not yet growing in direct proportion.
“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,” said Marcin Gruszka, head of communications at the Polish company.
The Czech Crunch server and the newspaper Hospodářské noviny reported on the layoffs. They also stated that, according to his sources, 120 people were to lose their jobs, most of them from the Mall.cz e-shop. “Our main goal is to restore the health of our Czech businesses. We are currently consolidating all our business activities into one common software solution and are investigating what possibilities we can offer CZC and Mall customers within Allegra,” added Gruszka.
The entire group was in the billions last year and laid off workers throughout last year. Overall, the entire Allegro group said goodbye to roughly five percent of the original number of employees last year. At the same time, Allegro was forced by the unfavorable market situation to reduce the valuation of the Mall Group, which it bought in 2021 from a group of Czech businessmen for 23 billion crowns. It currently values its Czech branch at roughly a third of this amount.
The entry of the Polish online marketplace into the Czech market was also influenced by the fact that other foreign players also invaded the Czech Republic at the same time, namely the German Kaufland, and especially the Chinese giants Shein and Temu. The second-named marketplace has rather shuffled the cards in the market, as it has invested considerable capital in the marketing campaign. Among other things, this meant a significant increase in the price of advertising and also less attention for the also prominent Allegra advertisement.
The Polish group plans to expand to three more European countries in the next two years and to reach profit in each of them within four years of launch. It started implementing this plan by entering the Slovak market in March. For a long time, Allegra’s management has not commented on what its plans are with the Mall and CZC brands, which currently operate in parallel alongside Allegra. Shortly after the launch in the Czech Republic, the management of the Polish marketplace for e15 stated that the fate of the domestic brands will be decided by the customers.
