As of: March 30, 2024, 7:23 a.m
By: Fabian Hartmann
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2024 could be a bad year for companies. Some have already had to file for bankruptcy. Which ones are affected, at a glance.
Munich – “A wave of bankruptcies is rolling through Germany”. You may have come across this statement several times in the reporting in recent months. A whole series of traditional companies had to file for bankruptcy within a very short period of time.
The number of bankruptcies rose significantly in January and February - the association speaks of a “perceived wave of bankruptcies”
However, the Association of Insolvency Administrators (VID) does not want to join in with the “wave of bankruptcies” rhetoric. “At best we are seeing a perceived wave of insolvencies,” explained insolvency administrator and VID chairman Christoph Niering to the
Tagesschau.
Despite the current increase in corporate bankruptcies, the number is only at the pre-pandemic level and is still far away from the peaks of the 2008 financial crisis.
Whether perceived or actual – according to the Federal Statistical Office Destatis, the number of regular insolvencies filed in Germany rose by 26.2 percent in January compared to the same month last year. And even in December 2023, it had increased by 12.3 percent compared to December 2022. In February there were 18.1 percent more bankruptcies filed than in February 2023. The mood in the German economy is likely to be rather depressed at the moment given the increasing number of bankruptcies of traditional companies. Their number has increased so much in the past few weeks that it's easy to lose track. So which companies have already had to file for bankruptcy in 2024, and which are currently in crisis?
The corporate group of the traditional luxury department store KaDeWe
At the end of January, the traditional KaDeWe Group (Kaufhaus des Westens) had to file for bankruptcy. What will happen next for KaDeWe in Berlin and the other two locations in Hamburg and Munich is currently still unclear. Although there have been no job cuts so far and KaDeWe's business is continuing to run as usual, the insolvency of the luxury department store could still cost Berlin taxpayers dearly. As the
Rundfunk Berlin-Brandenburg (RBB)
reported, the state of Berlin is currently guaranteeing loans from the department store group amounting to 18 million euros.
What's next for the traditional KaDeWe? © IMAGO/David Inderlied
Accordingly, the payment risk comes from a federal-state guarantee for a loan worth 90 million euros that the KaDeWe parent company took out in 2020 as part of the Corona relief measures. The federal government assumes half of the risk for the loan guarantee, while Berlin shares the other half with Hamburg and Bavaria. There are other KaDeWe Group department stores in these federal states: Alsterhaus and Oberpollinger.
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Now there is another annoyance that also affects the private customers of the insolvent department store: Anyone who ordered something from KaDeWe before the bankruptcy will probably not receive a refund of their deposit or the entire invoice amount for the time being. As part of his declaration of insolvency at the end of January, the head of the KaDeWe Group, Michael Peterseim, blamed the high rents of the also insolvent Austrian real estate group Signa for his own financial problems.
All companies that had to file for bankruptcy at a glance:
KaDeWe Group
German Confiserie Holding with the companies Hussel, Arko and Eilles
The Body Shop
Galeria Karstadt Kaufhof
Bree leather goods
Madeleine fashion and accessories
The confectionery, coffee and tea manufacturers Arko, Hussel and Eilles
There was also bad news for confectionery, coffee and tea manufacturers this year. The companies Arko, Hussel and Eilles, which belong to Deutsche Confiserie Holding, filed for bankruptcy at the end of February. The three companies had already gone through a process on their own in 2021 as a result of the corona pandemic. As a result, they were initially able to stabilize.
Empty windows at the chocolate manufacturer Hussel © Manfred Segerer via www.imago-images.de
However, “various macroeconomic effects” would have neutralized the stabilization successes again at the end of 2023, according to the announcement regarding the submitted insolvency application. As a result, further financing of the out-of-court restructuring was not possible.
The three companies, headquartered in Wahlstedt, Schleswig-Holstein, employ a total of 1,200 people. Their salaries are now secured through the insolvency money until the end of March, reports
Juve Verlag
. Business operations will continue, the administrator's office said in a statement. The proceedings are scheduled to open on April 1st. As was the case three years ago, only the branch business of the Eilles tea company is affected, which the company operates as a licensee of JJ Darboven Holding.
A traditional company in the cosmetics industry also had to file for bankruptcy
However, things were already economically bitter in other sectors in 2024: for example in the cosmetics industry. After the British manufacturer The Body Shop had to apply for bankruptcy protection in England in mid-February, the company's German representative also filed for insolvency. According to the Federal Gazette, the chain had 66 branches and more than 350 employees in Germany in 2021.
The Body Shop was founded in 1976 by Anita Roddick and her husband Gordon. As one of the first companies in the field of ethically produced cosmetics and skin care products, The Body Shop took a pioneering role in the field. According to its own statements, the company explicitly refrains from animal testing when manufacturing its products.
Not only closed on London's Oxford Street: a branch of the British cosmetics manufacturer The Body Shop. © IMAGO/Tayfun Salci
The Aurelius company, based in Grünwald near Munich, took over The Body Shop from the Brazilian company Natura in November 2023 for 207 million pounds (approx. 243 million euros). At that time it had around 10,000 employees worldwide. The brand previously belonged to the French cosmetics group L'Oréal.
(fh)