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Monday, March 27, 2023

Germany: Peek & Cloppenburg threatened with bankruptcy

Due to the difficult market situation, the Düsseldorf-based company Peek & Cloppenburg (P&C) is seeking salvation in the “protective umbrella” procedure. The company’s management has filed a request to speed up the restructuring process, which has already begun, the press service said. All 67 stores in Germany, as well as the online store, will remain open without restrictions.

P&C wants to use the “protective umbrella” procedure to adapt to changing market conditions in Germany and reposition itself for the future. Under current plans, the retailer does not plan to close any stores. However, it is already clear that “a slight reduction in administrative staff, including at managerial level” will be necessary.

The “protective umbrella” is a legal procedure that allows the company to work out the necessary measures for restructuring and reorganization under its own responsibility and to implement them in the short term, but under the supervision of an administrator temporary appointed by the court.

Massive drop in sales during Covid 19

In 2020 and 2021, the pandemic caused a massive drop in sales, the company said. “This resulted in triple-digit losses of $1 million,” said Steffen Schüller, CEO of the company since June 2022.

Moreover, according to him, customers’ consumption behavior has remained very cautious due to the military conflict in Ukraine. Delivery issues, rising costs, rising interest rates and a mild recession further clouded the retailer’s economic picture late last year.

There will be no mandatory layoffs.

P&C CEO Thomas Freude told WirtschaftsWoche that the company, which employs around 6,800 people, is likely to do without mandatory layoffs at its stores. “We assume that we will be able to complete the procedure by the end of the year at the latest.”

Based on the results, it will be determined which creditors are willing to make concessions so that the company can continue its activities. The owners’ family have “already pledged their support in principle”.

Abroad, the company was not affected

A request regarding the need for a “protective umbrella” procedure has also been submitted to Peek & Cloppenburg Retail Buying GmbH & Co. kg.

Other group companies in Germany and abroad, as well as sister company Peek & Cloppenburg in Austria, were not affected. They will continue their activities without restriction. This also applies to ANSON’S fashion stores in Germany.

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