In the request for liquidation of its assets, the Microplay company explains that the company became economically insolvent as a result of the effects of the social outbreak, the pandemic and the current economic crisis.
The popular video game store Microplay He initiated a judicial process to liquidate all his assets, as stated in the record filed in the 11th Civil Court of Santiago.
In this way, despite the fact that the company has not confirmed it publicly, this would be the last step for its final closure.
The voluntary liquidation of assets request document, to which BioBioChile agreed, was presented by the lawyer Nelson Contador Rosales on behalf of Microplay, and it explains the reasons for the decision.
The reasons why Microplay requested to liquidate its assets and close its stores
“The Company managed to grow steadily until it positioned itself as one of the leading companies in its field. Notwithstanding this, in recent years it has had to face various contingencies that have led it to a state of financial stress that makes the continuation of the company unfeasible,” the letter says.
In it, the company details that the reasons that led it to a state of economic insolvency are concentrated in three points: effects associated with the social outbreak, health crisis (pandemic) and current economic crisis and financial burden on the company.
1. Social outbreak
Microplay assures that during the social outbreak of October 2019 they were faced with the looting of their stores and the prolonged closure of some of them.
“Between mid-October 2019 and the end of December there was a significant drop in the Company’s sales, this being a strategic period for retail in general,” they explain.
“The social crisis resulted in the low influx of public in shopping centers and prolonged closures of stores. In addition, various branches were looted and destroyed, “they add.
Additionally, they indicated that sales decreased by approximately 14% and that they closed 2019 with negative results.
2. Pandemic
Regarding the health crisis due to the Covid-19 pandemic, they stated that they had to close stores once more for a long time.
“In the course of 2020, all or a large part of Microplay’s branches remained closed for long periods of time, with physical stores being the Company’s main sales channel,” they state.
“Thus, sales fell by 40% compared to 2019 and despite the efforts made, the year closed with negative results. Thus, the Company was forced to resort to state benefits, such as FOGAPE-guaranteed loans. The foregoing, in turn, resulted in the reduction of credit lines by the main suppliers, who demanded more working capital to be able to operate”, they added.
They also stated that “despite the fact that consumption and retail sales increased during 2021, Microplay was not able to cope with the financial problems due to the high financial burden, the decrease in credit lines from suppliers and the lack of sufficient working capital to purchase sufficient inventory.
“Again, we reached a last quarter with a decrease in sales and with a year-end with negative results,” they explained.
3. Economic crisis
And finally, they argued that they were hit by the current economic crisis.
Here they pointed to the increase in the price of the dollar, which since October 2019 has varied by more than $200 pesos. “The above has produced a strong impact on the costs of inputs, since the vast majority of the products sold are imported,” they say.
They also point out that inflation affected them. “During the last 12 months inflation has reached 13.7%. The foregoing has serious effects for the company, since among the main expenses of the company are the leases of the premises and logistics, costs that have increased considerably due to inflation, ”they argue.
Within the panorama of economic crisis, they also point to the drop in retail consumption and negative projections.
“Retail has been strongly affected due to the current economic crisis, due to a sharp decrease in consumption. Unfortunately, the figures are not encouraging and a decrease in our economy and even greater contraction in the sector are projected”, they point out.
Regarding the financial burden of the company, they state that “due to the high quotas of bank loans and the decrease in credit lines, it is not possible to maintain a sufficient inventory to maintain operations. The high financial burden of the Company does not allow it to have sufficient working capital”.
“Systematic deterioration in Microplay’s financial position”
Thus, they explain that the aforementioned reasons generated a “systematic deterioration in the financial position of Microplay SA from the last quarter of 2019”.
“Reasons for which it is currently unable to comply with its obligations to creditors, since an improvement in the economic contingency and an increase in the Company’s flows are not in sight in the near future,” the document states.
They finalize the legal document indicating that as a result of the exposed circumstances, the company is forced to request the Voluntary Liquidation of the company MICROPLAY SA
It should be noted that, as indicated by the Superintendence of Insolvency and Restarting (Superir), the liquidation of a company “is a judicial procedure whose purpose is the quick and efficient sale of the assets of the Debtor Company that has become economically unfeasible, with the object to pay its creditors.
That is, the goods are auctioned off in order to pay workers, suppliers and settle other items.
Microplay closes its website, stores and social networks
Although a few days ago the website of Microplay was still active, today only a blank page with the company logo appears.
Microplay.cl
Likewise, his Instagram account, which had not had any updates since December 28, has now been closed.
In addition, BioBioChile was able to verify that its stores are closed.
