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Circle files for bankruptcy for Dutch companies

Circle Media Group has filed for bankruptcy or its three Dutch printing companies, following the move to file for suspension of payments citing “very challenging market circumstances.”

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de Haas: “These bankruptcies could have been prevented with a more flexible law”

Payments were suspended for Roto Smeets BV, the holding company for the Dutch print companies, to determine any possibilities for a reorganisation of the companies, but Circle said it became clear that it was not feasible.

Circle will now work with administrators to “restart” Roto Smeets Deventer, Toto Smeets Weert and Senefelder Misset, whilst trying to secure jobs at the companies. The companies each specialise in a range of printing services including magazine printing.

Joost de Haas, executive director Circle Media Group and CEO of Roto Smeets Group, says the bankruptcies “are the result of the current, very challenging market circumstances in the European printing industry.”

He adds: “After a reasonable 2017, we saw a strong deterioration of the market in 2018. Paper prices increased with 15-20%, while our printing volumes decreased twice as fast as on average level. Under these circumstances, a planned reorganisation in the 2nd half of 2018 turned out to be insufficient during the first months in 2019.”

Paper prices increased with 15-20%, while our printing volumes decreased twice as fast as on average level

The group also cited the new Dutch Dismissal Law that proved to be “unworkable” for larger restructurings in a “shrinking industry, like print.” Under the law, severance payments are three times as high as they were under former redundancy plans, forcing companies into making pre-payment instead of spreading payments.

“Up to the introduction of this law, we were able to reduce our workforce with almost 1,000 employees in a socially-responsible manner, while bringing employees from work-to-work,” comments de Haas.

He adds: “This made it possible to adapt our capacity to our shrinking market and industry. The new law [is] counterproductive and now forces us to lay-off our employees without a social plan. These bankruptcies could have been prevented with a more flexible law.”

Circle Group recently sold Paris-based book printer CPI to private investor Richard Hughes and his family, who previously founded online fashion retailer boohoo.com.

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