According to the Falkensteg insolvency report “5 after 12” for the first quarter of 2026, the situation in retail remains tense, despite a decline in major insolvencies in the first quarter of 2026. This is particularly true in the fashion and non-food segments. According to the transformation consultancy Falkensteg, the number of major insolvencies in the fashion sector fell by more than 40 percent compared to the previous quarter. However, the report warns against misinterpretation: the record level at the end of 2025 distorts the comparison and there is no evidence of any structural relaxation.
On the contrary: retail bankruptcies rose by almost nine percent across all sales categories. Fashion and capital goods also recorded increases of around ten percent. According to Falkensteg, this shows a fundamental change in stationary retail, with classic non-food and fashion concepts particularly affected. “The total number of corporate bankruptcies is approaching new highs, while major bankruptcies are decoupling from insolvency activity,” the report says.
The consultancy cites the causes as increasing competition from e-commerce and Chinese low-cost providers, rising costs for rent, energy and personnel as well as consumers’ continued reluctance to buy. Geopolitical developments are creating additional pressure: The high US tariffs on Chinese goods are causing Chinese suppliers to increasingly divert their excess capacity to Europe – and often at even lower prices. Stationary fashion and non-food retailers in particular are coming under further pressure on margins.
According to the report, medium-sized chain stores with 50 to 300 locations, especially in the medium-priced decoration, fashion and non-food sectors, are particularly at risk. Companies without a viable omnichannel strategy or with a high debt capital ratio are considered particularly vulnerable. On the other hand, large discounters, online retailers as well as local suppliers and grocers are developing more stable. Falkensteg expects further growth of around 3.5 percent for e-commerce in 2026.