picture alliance/dpa | Hannes P Albert
The stationary fashion retail sector is in crisis and has to contend with a wave of bankruptcies among well-known chains this year.
Real estate and retail giant Signa recently faltered and allowed its listed subsidiary Signa Sports United to slide into bankruptcy. This includes, among others, the online shops Fahrrad.de and Tennis Point.
But Signa is not alone in this. The “textile industry” counts 92 bankruptcies since the beginning of the year – and in particular an increase among large players such as Peek & Cloppenburg. We show you seven popular fashion retailers that filed for bankruptcy in 2023.
Now the entire Signa Group is reeling. The real estate and trading empire of the Austrian billionaire René Benko has made headlines in recent years mainly because of the ailing retail giant Galeria Karstadt Kaufhof. Not all of the branches that were supposed to be closed after the last bankruptcy have yet been closed – Signa’s next trading subsidiary is already insolvent.
This time it hit the listed subsidiary Signa Sports United (SSU), which includes sports-specific online shops such as Fahrrad.de and Tennis Point. The reason: The parent company had refused a necessary financial injection because things weren’t looking rosy in the real estate business either. And according to Business Insider information, Galeria, the next retail giant, is already tens of millions behind plan in terms of profits and liquidity, even after its second bankruptcy.
But Signa is by no means alone in the fashion industry with the SSU insolvency. On the contrary: As the “Textile Industry” reports, 92 fashion companies have already gone bankrupt this year. The bear share of this fell in the first half of the year – with 82 insolvency applications, there were more than twice as many as in the same period last year. The number of major bankruptcies – that is, of companies with annual sales of at least ten million euros – has even increased eightfold.
Is Galeria Karstadt Kaufhof in trouble again? Internal documents show how high the losses are and how low the liquidity is
We’ll explain the reasons and show you which popular fashion chains have already filed for bankruptcy in 2023.
Corona aftermath and inflation: The reasons for fashion bankruptcies
The wave of insolvencies has subsided somewhat in the second half of the year – and overall the number of fashion bankruptcies has recently been well below pre-Corona levels. While there were 193 in 2019 and 199 in 2020, only 102 companies in the fashion industry filed for bankruptcy in 2022.
But the truth is that both stationary retail and online shops have rocked from crisis to crisis since 2020. While business in the city center branches sometimes came to a complete standstill during the pandemic or seemed unattractive between 2G or 3G rules and masks, online business was booming.
But many retailers misjudged the sustainability of this development. Instead of continuing to grow, the online market share in retail shrank from 14.7 percent to 13.4 percent in 2022, as from the online monitor of the German Trade Association (HDE) shows – in the fashion sector only 0.6 percent. Large players had also expected continued growth and, given the severe supply chain problems during the pandemic, often ordered more goods than necessary. And also built up more capacity – whether warehouse or personnel.
This would certainly not have happened to them with a crystal ball, because in 2022, with the war in Ukraine, inflation and increased energy costs also hit and depressed consumer sentiment. That becomes clear in the HDE consumption barometer, which between February and November 2022 slipped to its lowest value since the survey began in October 2016. Luxury brands were less affected because the target group was less affected by inflation. However, especially in the mid-price segment, consumers often turn to cheaper alternatives.
1. Peek & Cloppenburg
Jens Kalaene/picture alliance via Getty Images
The interaction of the various factors can be seen at Germany’s largest fashion retailer. Peek & Cloppenburg – more precisely P&C Düsseldorf – lost around 30 percent of its sales during the pandemic. They closed 2021 with 1.055 billion euros.
However, there were also structural problems in stationary retail. The online strategy was not working even before the crisis and various personnel changes at the top also did not help to make the company fit for the future.
Galeria Karstadt Kaufhof is bringing in new top managers and plans to hire 3,500 new employees
The situation finally escalated in March 2023. Peek & Cloppenburg was burdened with 400 million euros of debt and its most important manager, Edgar Hert, gave up. The company filed for insolvency in order to reorganize itself under self-administration. 350 headquarters employees left the company until creditors approved the restructuring plan in August. The core of it is surprisingly: store first.
2. Reno and HR Group
picture alliance / | –
Shoe retailer Görtz was hit by the end of 2022. With Reno, Germany’s second largest shoe chain after Deichmann was added in March 2023. To be more precise, two companies: Reno Schuh and Reno Schuhcentrum.
The creditors demanded a total of a good 100 million euros according to “Textile Industry”. At the time the application was submitted, there were still 180 Reno branches – of which 20 locations will remain after the insolvency proceedings have been completed, primarily in and around Berlin. For comparison: In the 1990s, Reno was still part of the Metro Group and had around 850 locations.
Two weeks later, Reno’s former parent company was also hit: the HR Group from Osnabrück. It was an IT and logistics service provider for retail customers – most recently, among others, for the ex-subsidiary Reno, which was sold in 2022.
3. Gerry Weber
picture alliance / GEORG HOCHMUTH / APA / picturedesk.com | GEORG HOCHMUTH
Gerry Weber was founded 50 years ago – in April, the women’s fashion group again applied for pre-insolvency restructuring proceedings just four years after its first bankruptcy. The chain is in debt of 150 million euros – the retail subsidiary Gerry Weber Retail and the Austrian subsidiary filed for bankruptcy.
In August, the creditors voted for the restructuring and realignment of the group. And that amounts to clear-cutting: 122 of the 171 branches are closing. 350 positions are affected, 75 more in the branch. After the first restructuring, the austerity measures were initially effective – but inflation and the effects of the Ukraine war sent Gerry Weber into a tailspin again.
Also in April of this year, Ahlers AG filed for bankruptcy – both for the AG and for seven other companies in the group. Sales for the 2020/21 financial year were around 170 million euros. The men’s fashion manufacturer owned well-known men’s brands such as Pierre Cardin, Baldessarini, Pioneer Jeans and Pioneer Workwear.
Instead of department stores like Galeria: These newcomer chains could now take over the city centers
In mid-June, the medium-sized fashion chain Röther announced that it wanted to take over parts of the group. Among other things, the Pierre Cardin license is included, as is the subsidiary in Sri Lanka with 900 jobs.
5. Peter Hahn
picture alliance / Snowfield Photography | D. Kerlekin/Snowfield Photography
The Swabian fashion retailer Peter Hahn and Signa Sports United are one of the latest additions to the list of insolvency applications. He is not yet insolvent either, but has entered into so-called protective shield proceedings.
The multiple crisis effects are also evident among the Swabians: Peter Hahn still counted in 2021 according to “Textile Industry” in the womenswear market, one of the winners of the pandemic, sales increased in double digits thanks to the best ager customers, i.e. customers over 50 years old. However, Peter Hahn ordered too much for spring and summer 2023. As a classic catalog mailer, he also felt the effects of high paper prices and had internal problems with inventory management and returns.
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