Ecom Teams (former Footway Group) intends to report its bank’s actions to the Swedish Financial Supervisory Authority for investigation.
Swedish footwear retailer Ecom Teams (former Footway Group) has had major problems for some time but managed to turn a loss into profit in Q4 2024. Now it seems the company is facing further economic challenges.
After Danske Bank didn’t comply with the agreement regarding repayment of Ecom Teams’ entire overdraft facility, the company declared insolvency. The Board of Directors believes reaching a solution with Danske Bank is impossible and alternative options are uncertain, meaning the company’s illiquidity is not temporary.
The situation results from a breach of a refinancing agreement and payment instructions by Danske Bank.
Danske Bank took SEK 52 million (€4.7m) without returning the corresponding corporate mortgage, preventing the company from carrying out the agreed refinancing. According to the company’s legal advisor, the action is a violation of good banking practice and a breach of the agreement entered into.
Ecom Teams’ CEO Daniel Mühlbach is hoping everything will be sorted out as soon as possible. “Together with our suppliers and partners, we have struggled over the past year and finally managed to return the company to profitability,” Mühlbach said. “Danske Bank has been our banking partner for 12 successful years. However, their recent actions are incomprehensible and extremely unfortunate for everyone involved.”
Impact on the business and expected damages
The bank’s actions have forced the company to halt product deliveries during Q4 and suspend summer and winter 2025 purchases. The estimated total loss is 100 to 150 million SEK (€9.1m to €13.6m). The company has transferred the claims process to Danske Bank and intends to report the bank’s actions to the Swedish Financial Supervisory Authority for investigation. In parallel, the Board of Directors and management are working with insolvency lawyers to evaluate alternatives to bankruptcy, such as reorganization. The company has therefore decided to suspend payments.
Dialogue with Danske Bank and refinancing attempts
Ecom Teams has started a dialogue with Danske Bank to avoid further financial damage to customers, shareholders and suppliers. The company has worked out a refinancing proposal for its loan, but Danske Bank has rejected it. The company therefore considers the odds of repaying the loan to Danske Bank unlikely and has announced that it is in default.
