The laundry chain Herzog & Bräuer Handels GmbH & Co. KG is insolvent again.
On November 10th, the Leipzig District Court ordered judicial restructuring proceedings under self-administration at the request of managing director Frank Herzog, the company announced on Monday. The aim of the process is now “to reposition Herzog & Bräuer in a timely and sustainable manner in order to ensure the continued existence of the company with its 400 jobs”.
This is the second insolvency proceedings within just a few years for the retailer based in Rötha, Saxony. The company only went through a restructuring process under self-management in 2021. At the time, the effects of the Covid-19 pandemic had brought the laundry provider into financial difficulties. According to its own information, Herzog & Bräuer currently operates 93 branches nationwide, an outlet store and its own online shop.
Buyer reluctance and higher costs brought the retailer into financial difficulties
The renewed “economic difficulties” can now be attributed “to the unexpectedly low sales after the corona pandemic, the increased reluctance to buy and the increase in general costs,” according to a statement. “The recovery of branch business after the end of the pandemic fell short of expectations – sales were unable to return to pre-crisis levels. At the same time, costs rose significantly in almost all areas of the company.”
Overall, “customers’ reluctance to shop and the falling number of visitors to the branches in 2023 and 2024 led to a progressive reduction in liquidity,” the company explained. The “out-of-court measures that had already been initiated” were no longer able to “improve the situation sufficiently,” so the insolvency application became necessary.
Managing Director Herzog sees “an opportunity for a new beginning”
However, managing director Herzog was confident about the retailer’s future. “Even if the step into judicial restructuring is difficult, we see the process as an opportunity for a new beginning. I am firmly convinced that together with a clear restructuring strategy and a focused orientation we can get our company back on a stable course,” he explained in a statement.
Meanwhile, business operations “continue to run without restrictions,” the company said. The wages and salaries of the employees are “secured for the months of November, December and January by the insolvency benefit from the Federal Employment Agency”.
As part of the ongoing restructuring process under self-administration, the management is supported by Simon Leopold, the managing director of ABG Consulting-Partner GmbH and Co. KG, on commercial issues. He is also involved in developing a “sustainable restructuring concept”. The lawyer Jörg Schädlich from the law firm Stapper | Jacobi | Schädlich was appointed as interim administrator. Stefan Ettelt from the law firm Kulitzscher & Ettelt supports the company as general representative in insolvency law issues.