Strunal Schönbach s.r.o, a leading manufacturer of musical instruments in Luby, Czech Republic, is going out of business. The company, which sold string instruments, has been struggling since the beginning of the year. Although it managed to find a solution in the form of a reorganization, the coronavirus pandemic and the global decline in sales eventually led to bankruptcy and now to the company’s closure, according to documents in the insolvency register.
“Strunal Schönbach, a leading European manufacturer of stringed instruments, ceased production at the end of July 2020. Paradoxically, this happened after the company’s management took the necessary steps to recover the company, which had struggled in previous years,” the company said in a press release.
Strunal recently employed about fifty people. But, they were let go at in July. The costs of further operation of the company would drive the company deeper into debt. The insolvency administrator, therefore, requested the cessation of operations.
“It is clear that currently, the market for musical instruments is also affected by the pandemic situation, and further developments are challenging to estimate. The debtor himself stated that his largest markets were markets abroad, such as Canada, USA, and Russia, and gradually lost about 60 percent of orders, “said insolvency administrator Lukáš Zrůst. At the same time, the company’s monthly costs were around CZK 800,000.
Other manufacturers of musical instruments, which the insolvency administrator approached with an offer to buy or take over the operation of Strunal, are in a similar situation. But everyone refused because of the uncertainty in the market. Because Strunal Schönbach is in insolvency proceedings, it did not apply for the state loan programs COVID.
Strunal’s debts are now CZK 57.6 million. Thirty-five creditors registered their claims. The company’s property consists mainly of a large area in Luby, but also machines, supplies, and work in progress.
Strunal had sales of CZK 30 million in 2019 and a total turnover of CZK 35.7 million. However, it reported a loss of CZK 15.5 million, in 2018, it was a loss of 13.3 million crowns. The company’s assets most likely will be sold off by the insolvency administrator in individual units.
Strunal Schönbach continued the tradition of the national company Cremona. Which was the largest manufacturer and exporter of stringed musical instruments in Europe before 1989. In later years, however, the company faced growing competition from Chinese manufacturers and gradually shrunk.