Escom files for bankruptcy

By Martin Veitch
ZDNet

July 16, 1996

German PC maker and retailer Escom AG said yesterday it was filing for bankruptcy, the latest chapter in a turbulent and calamitous year for the firm.

Just last year Escom was seen as a juggernaut and one of the leading lights of the European PC market. Now, analysts are composing the firm's swan song, citing its expansionist policies and low, low pricing as key reasons for the firm's collapse. Even by the standards of an industry renowned for its cut-throat nature, the speed of the firm's spectacular collapse has astonished observers.

Escom declared itself insolvent in July after making heavy losses in the first half of 1996, and cutting almost half its staff of 4,400. Slowing growth in its main European markets, particularly Germany, was blamed and a poor Christmas period was seen as particularly harmful. Founder Manfred Schmitt resigned in March. At the time, UK management said the operation in this country continued to be profitable.

Escom's one-time arch-rival Vobis has said it has no interest in acquiring all or part of the company.