25 Cigoteket employees to remain after the sale
One of Sweden's largest vejp companies, Cigoteket, is changing owners. But the shops continue to operate as usual.
That's according to founder John Adams, who is now winding down much of his business in Sweden.
- It feels strange, but it doesn't affect the staff and I'm sure the company will grow stronger under the new owners," he tells Vejpkollen.
Cigoteket, like several other companies in the e-cigarette industry, has suffered several setbacks in recent years. It started in the US in the fall of 2019. An outbreak of lung damage, caused by illicit cannabis products, were linked to e-cigarettes.
Initially, the authorities warned all e-cigarette users that they could be at risk of lung damage. They then changed their minds and pointed to the real cause: the substance e-acetate in THC products. So not regular e-cigarettes.
But the damage was already done, says John Adams.
"The companies did very well and we increased our turnover by almost 100 percent every year, until the fall of 2019. Then the US authorities came with their recommendations and made a big mess of things. Although they later changed their minds, we lost almost all our American customers," says John Adams.
Coronavirus halted new start
Even then, Cigoteket chose to reduce its operations in Sweden, with some stores closed as a result. "The idea was to reopen them when the situation became more stable," says John Adams.
But then Covid-19 came along and turned everything on its head. Once again.
"The shutdown of factories in China and extreme product delays were an extremely big blow to us. It became very difficult to get approved and registered products into Sweden" says John Adams.
Plans to open closed stores were now becoming increasingly remote.
"We wanted to focus on the Swedish market in 2020 and reopen new stores in mid-2021. Unfortunately, that didn't happen."
Employees stay on
Last week, John Adams chose instead to put two of its Swedish companies, Cigoteket and Subohm, into bankruptcy. The store operations and the online shop were sold to the company Svenska Vapegruppen AB. Behind Vapegruppen is, among others, a former employee of Cigoteket.
According to John Adams, Cigotek's 25 permanent employees will not be significantly affected. All have been offered to stay in their jobs.
Cigoteket becomes largest customer
John Adams, for his part, will continue in the industry with his internationally based import company SubOhm Co ltd.
With Cigoteket as its largest customer.
"My brother and I will also continue to work internationally with the rest of the EU, the Middle East and Asia, which is a big market for the products we provide. We also have a new project in the pipeline in Sweden that we will be launching shortly," he told Vejpkollen.
Cigoteket currently has shops in Norrtälje, Stockholm and Gothenburg, as well as online. According to John Adams, the plan is to continue as usual, but under new management.
Both behind Svenska Vapegruppen AB are former employees of Cigoteket. The company is signed by John Adams' brother.
A case of "keep it in the family", then. Not entirely uncommon. Thanks for the info! /stefan