Why Did Belvest End Up In The Death?

A well-known shoe manufacturer has gone into bankruptcy.

The company was put in the hands of an anti-crisis manager. Three years were given to save the firm. Economist Anastasia Luzgina in a commentary "Belsat" noted that the fate of the company can't be considered a foregone conclusion, and explained the problems of the brand by lost competition.

Vitebsk company Belvest was in a financial hole: the debts of the company exceeded Br259 million, and the shoe manufacturer can no longer pay for them. The firm itself appealed to the regional economic court, and the court initiated insolvency proceedings.

In respect of the debtor bankruptcy proceedings were opened for 4 months. Baikov and Partners LLC was appointed as an anti-crisis manager.

Anastasia Luzgina, an economist of the BEROC research center, diagnosed Belvest as having failed to withstand the competition.

"These problems are associated with a very large competition, including with China. Yes, Belvest tries to produce shoes made of genuine leather, which cannot be very cheap. But the question here is what the consumer chooses. The consumer needs modern beautiful shoes. Naturally, preferably inexpensive. It can be seen that Belvest has problems with this very thing.

The expert noted that in general, there is no need to be embarrassed by the civilized procedure of bankruptcy and rehabilitation, it's normal.

"The fact that the company goes to court and declares its financial insolvency is a common, natural thing. It can happen that a company accumulates debts, which it can't pay off, and it officially declares about it.

After that, it can go the way of rehabilitation, as it happened in the story with Belvest: "In this case, temporary external managers are appointed, who will develop a new strategy, will try to bring the company to normal operation, which will allow to pay off debts in the future and operate at break-even.

In general, the brand is planned to be reanimated in three years - this is the term of the preliminary plan of rehabilitation.

So, the enterprise will continue to work and will flounder like the frog from the parable about milk and butter. And if Belvest doesn't get out of the jug during the allotted three years of sanitation, then there will be a threat of shutting down production.

Although in this case, the death of the enterprise is not inevitable: the authorities may come running with money to save it, says Luzgina.

"Such cases have also happened in Belarusian practice. That is, if the authorities consider that it's a very important company for the market, or for the preservation of people's employment. The same "MotoVeloZavod" is periodically recalled, what support was and is being provided there. That is, such scenarios can't be excluded in the case of Belarus," says the expert.

The story of Belvest is not the only one in recent times. In 2023, retailer Vitalur, although it avoided bankruptcy, but in order to pay off its suppliers and creditors, was forced to lease all its stores, as well as sell equipment and remnants of goods to Santa.

Last year, the economic court of Minsk began bankruptcy proceedings against Neftekhimtrading, which owned a chain of gas stations Triple Yuri Chizh. Its debt to creditors exceeded $4.5 million.

This year it became known about the problems at "Amkodor" businessman Alexander Shakutin. The company was nationalized. August 18, at a meeting with the government, Alexander Lukashenko said: "Since the former owners of the holding really recognized that they could no longer provide repayment of borrowed funds, that is, they recognized that they had taken debts and could not repay them, we were forced to take the management company into state ownership.

In June, an unenviable fate befell a resident of the Chinese-Belarusian industrial park "Great Stone": the bankruptcy procedure was started by the plant "Composite Structures. However, as economist Anastasia Luzgina emphasized, there is no epidemic of bankruptcy in Belarus.

"If we look at the macro level, there are no major changes. The only thing is that in 2024, there was an increase in the number of enterprises, which reduced profitability, that is, the efficiency of work," summarized the interlocutor of "Belsat.

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