The Sonica Group of Belgian entertainment and electronics retailers has filed for bankruptcy with the Brussels court of commerce and 421 staffers of the company were laid off Nov. 18. Meanwhile, the official receivers have announced to aim for a continuation of Sonica's activities to encourage potential buyers.

Sonica was founded by Willy Machtelings, whose parents owned a record shop in Brussels since 1936 ("Au Roi du Disque" - The King of Vinyl). Sonica developed its retail section with the acquisition of well-known music stores like Metrophone, Caroline Music and Music Way. In 1990, Sonica took over nine of FNAC's 'Forum' stores in Belgium, followed by a majority stake in Video Square and the acquisition of seven Super Club stores in Flanders.

At press time, Sonica operates 58 stores including the Extrazone shops (grouping the majority of the company's music, DVD and videogame activities), eight Sony Centers (electronic goods) and three Bilbo (specialized) record stores.

Early November, Sonica announced the shutdown of its Bilbo stores with the option of closing Extrazone stores later on, and pointed at illegal downloading and piracy as main reasons for the decline, which made the company's financial results end up as a loss in 2008. In an attempt to safeguard Sonica, the company pleaded for a judicial agreement followed by substantial restructuring, but ultimately it filed for bankruptcy instead.

In a first reaction, Olivier Maeterlinck, director of the Belgian Entertainment Association (BEA), says he hopes that the receiver finds a buyer quickly and that the Extrazone and Bilbo stores will be able to continue their activities as soon as possible, with minimal loss of jobs.

"Entertainment stores remain the most important channel for sales of CDs, DVDs and games, with 90% of physical sales effected in the points of sale," he says. "Illegal downloading and piracy are a threat to everybody involved in the entertainment industry, putting planned investments under pressure. We demand that the Belgian government takes serious measures to fight the illegal practices to protect the income of over 100,000 people that, directly or indirectly, work in the entertainment industry here."

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