Luxury German brand Gerry Weber in insolvency proceedings
In a sign that retail financial turmoil is extending beyond the UK upmarket German womenswear brand Gerry Weber, which has outlets in a number of UK department stores, has entered preliminary insolvency proceedings after talks with its finance partners broke down and is to cut hundreds of jobs in Germany and abroad
28 Jan 2019
The company said it had applied for the court order for preliminary insolvency proceedings, but aimed to try and restructure its operations and has brought in an expert, Christian Gerloff, to support this.
The order applies to parent company Gerry Weber International, which said all subsidiaries are currently excluded.
Key measures, which have been agreed with the company’s auditor Ebner Stolz include the closure of around 230 retail spaces, as well as a significant reduction of workforce of up to 900 jobs, both nationally and internationally, with staff cuts planned in the retail stores as well as in centralised functions including logistics.
The move into insolvency was triggered by the failure of talks with its financing partners, which the company said made the move ‘inevitable’.
Johannes Ehling, spokesman for the managing board of Gerry Weber International, said: ‘Up to the last moment there were major efforts, to avert the proceedings. I am absolutely convinced, that after the successful restructuring we will return from the proceedings back to the path to success.’
Florian Frank, member of the executive board of Gerry Weber International and chief restructuring officer, said: ‘By entering the preliminary proceedings under self-administration, we are now gaining the flexibility to press ahead with the initiated measures of restructuring.’
‘We are benefiting from the fact that over the past few months we have been able to prepare the necessary structures in the financial sector in order to ensure successful management of the company with the greatest possible transparency.’
Established in 1973, Gerry Weber has approximately 1,230 company-managed stores and sales spaces, approximately 2,480 shop-in-shops and 280 franchised stores worldwide, as well as brand online-shops in nine countries. With some 6,500 employees worldwide and distribution channels in roughly 60 countries, the group is one of the largest listed fashion companies in Germany.
In the financial year 2016/17 the Gerry Weber Group generated sales revenues of €880.9m and operating income (EBIT) of €10.3m.