After the recent announcement that the Düsseldorf-based Peek & Cloppenburg’s initiated pre-bankruptcy proceedings, Wirtschaftswoche summarized a list of all German fashion retailers which have recently undergone such process. Many names will be familiar as they have strong store network in shopping malls and city centres across the DACH region and neighbouring countries.
As a general reminder, in the pre-bankruptcy proceedings oftentimes:
- Suppliers and banks lose (a part of) their money,
- Owners lose (a part of) ownership over the company, and
- Employees (or part of them) lose their jobs.
Here is the full list of the companies:
- Peek & Cloppenburg
- Galeria Karstadt Kaufhof (as a result of going through the process for the second time in the last three years, they are constantly reducing number of stores)
- Ludwig Görtz
- Orsay (the company has not recovered and has been liquidated)
- Escada (once famous brand, now operates only one store in Munich)
Some of these companies used to have revenue of billions of euros and have co-operated with leading global showbiz stars.
The most common reasons for bankruptcy of fashion retailers:
- Too much debt
- Slow to adjust to customers’ needs and trends
- Unclear value proposition
- Weak market positioning
- Strong competition in both offline and online segment
How safe is your company?