After two years marked by the Covid 19 pandemic, 2022 should actually bring a return to normality for the German fashion and shoe trade. The biggest burdens in the industry – temporarily ordered store closures or protective measures such as compulsory masks and 2G rules – were a thing of the past.
However, the hope for a comparatively carefree year lasted only a few weeks: After the Russian invasion of Ukraine on February 24, the retail sector suddenly found itself confronted with new challenges: Massively rising energy prices drove inflation to unimagined heights, causing consumer sentiment to plummet :inside to new lows until autumn.
This had consequences for the industry: In view of the adverse conditions, numerous retailers got into financial difficulties, and urgently needed financiers were scarce. Ultimately, therefore, some well-known companies had no choice but to go to the insolvency court.
Further closures planned: Galeria Karstadt Kaufhof is going through the second protective shield procedure within two years
The most prominent case in this country was not a big surprise. The department store group Galeria Karstadt Kaufhof has been weakening for years. It was only in 2020 that it went through insolvency proceedings and closed around forty branches. In view of the high energy prices and increasing uncertainty among consumers, the retailer once again found itself in a “threatening situation”, as CEO Miguel Müllenbach had to admit in a letter to employees in autumn.
After failed negotiations on new state aid, the company, which had already received aid totaling 600 million euros in recent years, had to apply for a protective shield procedure again at the end of October. Now further serious cuts threaten. Numerous unprofitable locations are to be abandoned. How many of the last 131 branches will survive for the time being, the company wants to announce in January following the analyzes and negotiations with landlords that are still ongoing. In view of the renewed crisis at the last major German department store operator, the discussion revived as to whether the business model still has a future at all.
The shoe retailer Görtz is also suffering from the adverse conditions
The increasingly deteriorating framework conditions also brought other companies into payment difficulties. In September, for example, the Hamburg shoe retailer Ludwig Görtz GmbH had to apply for a protective shield procedure for the holding company and for the two operating subsidiaries Görtz Retail GmbH and Görtz Logistik GmbH to file for insolvency proceedings under self-administration.
The traditional company justified the step with “significant sales declines” due to the increasing “purchase reluctance” of consumers in view of the high inflation. As part of the ongoing renovation program, the shoe retailer will also disappear from many shopping streets. The exact number of closures has not yet been determined. At the beginning of the process, Görtz operated around 160 branches in Germany and Austria.
More bankruptcies in the footwear industry
In addition to the industry giant Görtz, a number of other companies from the shoe industry were also affected. In the course of the year, the two companies belonging to the Hamm Group, HC Footwear GmbH and HS Footwear GmbH, had to file for insolvency. The end of the shoe license partner HC Footwear, which was announced in May, had serious consequences for the Camel Active brand. Neither in the current autumn-winter season nor in the coming spring can new shoe collections be offered by the label. The restart of Camel Active Shoes should now succeed in the autumn/winter 2023 season with the new license partner Gerli.
Numerous other shoe suppliers got into financial difficulties. In September, the online retailer Surf4shoes GmbH, in which the HR group holds a majority stake, had to file for bankruptcy, followed in December by Gebrüder Götz GmbH, which had just gone through the relevant proceedings.
Shortly before the turn of the year, Ara AG finally applied for protective shield proceedings for the retail chains Klauser GmbH & Co. KG and Salamander Deutschland GmbH & Co. KG. Again, the slack in consumption as a result of high inflation was given as a reason. This made it impossible for companies to make up for the loss in sales suffered during the Corona years.
While most of the companies affected continued their business operations and are striving for restructuring as part of the ongoing insolvency proceedings, the Swiss retail chain Vögele Shoes came to an end. The operating company Karl Vögele AG, which has belonged to Hanover-based Cm.shoes GmbH since 2021 and filed for bankruptcy in the summer, prematurely ended its rescue efforts at the end of November and will now close all 27 branches by the end of the year.
International: Missguided, Joules and Kings of Indigo rely on new owners after bankruptcy
There were no spectacular cases of insolvency in the German textile trade, after well-known suppliers such as Gerry Weber, Bonita, Hallhuber, Esprit and Adler had been affected in recent years. In 2022, medium-sized companies tended to get into difficulties, such as the Munich retailer Keller Group GmbH, which filed for insolvency proceedings under self-administration at the end of November. According to the company, in addition to supply chain problems, “the significantly worsened consumer and market conditions due to the Ukraine war” caused liquidity bottlenecks.
Internationally, the year also remained comparatively quiet after the many bankruptcies of large companies in recent years. But in 2022 well-known brands such as the British fast fashion supplier Missguided, the clothing supplier Joules or the Dutch denim label Kings of Indigo had to file for bankruptcy after failed restructuring attempts. After Missguided was immediately taken over by the British retail group Frasers Group and Joules by the fashion group Next, Kings of Indigo now wants to start again with new owners.