The garment manufacturing company AB Šatrija, part of the Utenos Trikotažas group, will cease operations as of July 21. The decision was made by Šatrija's Board on June 20. This process will have no impact on the operations or restructuring process of Utenos Trikotažas.
"The decision was extremely difficult, but necessary in light of current market trends. Our top priority now is to ensure that every Šatrija employee receives all compensation to which they are entitled. This process will not affect Utenos Trikotažas operations or its restructuring plan. The companies operate independently - Šatrija provides garment manufacturing services to external clients, while Utenos Trikotažas offers a broader range of services," stated Vytautas Vaškys, Chairman of the Board of Šatrija.
The decision to cease operations follows a review of the company's financial performance over the past two years. During this time, competition in the textile industry has intensified significantly: Šatrija's clients increasingly relocate garment manufacturing services to lower-cost countries in Asia or Africa. In Lithuania, rising labor costs and other expenses have made it financially unsustainable for the company to operate - even at full production capacity, Šatrija has faced ongoing financial losses since 2023 and is no longer able to compete on price with lower-cost third countries. For these reasons, the company's Board has decided to cease operations.
Šatrija will fulfill all current client obligations by July 21 and will not accept any new orders. In the near future, the company will contact creditors to seek assistance and initiate insolvency proceedings. Shareholders will also be informed of the process being launched.
The restructuring plan of Utenos Trikotažas had already included the sale of AB Šatrija shares. With the initiation of insolvency proceedings, Šatrija's assets will be sold, meaning that this development will not materially affect the restructuring process.
Additional information is available from Aurimas Likus, Finance Director, tel. No. +370 618 07809.
