According to the announcement of Keravill owner publicly traded Fotex Rt., the company did not intend to engage in a fierce price war with recent competition from foreign electronics chains, and instead will close down. While competitors applied huge discounts and dumping prices to gain market share, Keravill based its business on traditional values and rewarding loyal clients with additional services.

Keravill owner Fotex Rt. started a bad cycle in the beginning of 2003, when it made HUF 300 million losses in the first quarter. Losses kept mounting up and the company managed to stay in the black by selling its chain of shops selling mobile phone phones and accessories to Westel, now T-Mobile Hungary Rt. Fotex revenues fell 6% in 2003, and then 19% in the first nine months of 2004. In the January-September period Fotex generated about HUF 700 million in losses.

Meanwhile, Keravill’s revenues were also down. They fell 20% in Q1 2003 and dropped 63% in Q1 2004. The chain closed 28 stores in 2003 and 2004.

Fotex now is believed to own 400 real estate properties, and it is expected to rely on that asset in the future rather than its ailing retail businesses.