The German fashion chain Adler, which is also represented in Austria with 24 branches and almost 300 employees, has filed for insolvency proceedings in self-administration due to overindebtedness. The reason for this is the corona lockdown, the company announced. The aim is therefore to reorganize the company through an insolvency plan. Business operations are to be continued in full.
The foreign subsidiaries are not affected by the bankruptcy, it said. Adler Modemärkte AG, based in Haibach near Aschaffenburg, is one of the largest textile retailers in Germany. The company operates 171 fashion stores, 142 of them in Germany, 24 in Austria, three in Luxembourg, two in Switzerland, and an online shop. The company concentrates on large-area concepts with more than 1,400 square meters of retail space and focuses primarily on the age group 55+.
The Aschaffenburg district court confirmed the receipt of an application for insolvency by Adler Modemärkte AG on Monday. An expert had been commissioned to check whether the processing of the bankruptcy on one's own responsibility was possible, said the responsible insolvency judge Jürgen Roth of the German press agency.
The trigger is the considerable loss of sales due to the closings of almost all sales branches since mid-December 2020 as a result of the lockdown. It was not possible to close the resulting liquidity gap by injecting capital through state support funds or through investors.
The board of directors remains authorized to administer and dispose of. This lawyer has appointed Christian Gerloff as general agent for support. Adler Mode GmbH, Adler Orange GmbH & Co. KG and Adler Orange Verwaltung GmbH – each wholly owned by subsidiaries – have also decided to apply to the Aschaffenburg District Court to open insolvency proceedings under self-administration.
The group achieved a turnover of 495.4 million euros in 2019. As of September 30, 2020, it had around 3350 employees. The company was founded in 1948 as a clothing company in Annaberg (Saxony).
Even if the foreign subsidiaries are not currently affected by the bankruptcy, Austria is heavily dependent on the German mother. The Austrian company's purchase of goods is almost 100 percent via the German parent company, according to “FirmenCompass” in the 2019 annual financial statements. In 2019, Adler in Austria had sales of around 67.3 million euros less than in 2018 (around 68.2 million euros). “Adler could not escape the negative industry trend in the textile retail trade and suffered – like the entire industry – from increasing competition between locations. Above all, the migration of larger sales shares to the Internet left its mark. In addition, the Christmas business is becoming less important,” writes the company in the management report. The Austrian profit more than halved to 0.6 million euros in 2019.
Many companies in the fashion industry were not doing well before the corona crisis. They had little to counter the triumph of online retail and the success of fast fashion providers such as Primark or Zara. The coronavirus hit victims of manufacturers and retailers who had previously been damaged, so to speak, when it caused shop closings across the board in spring 2020. With Airfield, Colloseum, Dressmann, Haanl and Stefanel, there have been numerous bankruptcies in the fashion trade recently. The German industry association BTE only warned a few days ago of a wave of bankruptcies in the fashion trade.
