Swedish Economy

Toy Train Company Hits the Buffers

The well known Swedish wooden Toy manufacturer Brio is on the verge of bankruptcy. The company, which was founded in the 1800’s, said in its 2008 earnings statement  ”Brio is in a serious situation and the board deems that the group will shortly face an acute liquidity shortage.”

The company added, ”Due to the lack of profitability, one-off costs and the existing need for refinancing, the board deems it necessary for Brio to receive a capital injection of a minimum of 300 million kronor (34 million euros, 43 million dollars).” 

Brio, which is renowned for its wooden trains, said it had struggled for the past decade with significant structural problems and had under invested in product development.

For 2008, Brio posted a net loss of 75.3 million kronor compared to a net loss of 82.6 million in 2007.

Brio has ”a pessimistic outlook in terms of consumer trends over the coming years,” it said.

”This will probably put extra pressure on the entire industry, which will lead to an increased operating capital requirement for Brio,” it said, adding that its ”high rate of debt inhibits Brio’s possibility of successfully carrying out the restructuring and development necessary.”

The company, which also makes children’s furniture and baby carriages, is majority owned by the Swedish investment fund Proventus.

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