The ailing clothing retailer Gerry Weber is closing 122 stores and outlets in Germany and cutting jobs.
The company from Halle in Westphalia, which is in the ongoing restructuring process, intends to focus more on its wholesale business in the future, Gerry Weber announced on Monday. This also means that the branch network in the home market is to be reduced.
Of a total of 171 locations in Germany, 49 will be retained. The locations that will not be closed are shops that are already profitable and have future potential, according to Halle. In addition, the German concession business is to be discontinued. The closures are expected to be completed by the end of September.
“By consistently turning to the wholesale business, Gerry Weber is returning to its roots,” said Gerry Weber CEO Angelika Schindler-Obenhaus. “At the same time, we are finally ending the course we took more than ten years ago of overly ambitious expansion of our own retail business, which has turned out to be neither market-oriented nor sustainable.”
350 jobs at German retail subsidiary affected
The closures also affect 350 full-time jobs at Gerry Weber Retail GmbH, which will be eliminated. There will also be job cuts at headquarters. Around 75 employees at Gerry Weber International AG and Life-Style Fashion GmbH will be made redundant.
“As radical as the realignment that has been decided is, especially for the employees affected, Gerry Weber must use this restructuring process consistently to create a sustainably profitable business basis despite all the adversities in the market,” said Christian Gerloff, Chief Restructuring Officer of the Gerry Weber Retail GmbH. “The company will not get another chance to do this.”
On April 20, the German retail subsidiary applied for insolvency proceedings under self-administration at the competent district court in Bielefeld. The case opened on Monday. The court has appointed Stefan Meyer from Pluta Rechtsanwalts GmbH as trustee. He was also active as a provisional trustee in the provisional self-administration proceedings.
In addition to the realignment of the retail subsidiary, Gerry Weber International AG is also in a restructuring process that “started as planned”, according to the company. The next step is the submission of the restructuring plan, which is to be submitted to the competent restructuring court in Essen in mid-July. The company is currently in negotiations with investors and relevant creditors. Meyer is also active in these proceedings as the restructuring officer appointed by the court.
“I’m convinced that Gerry Weber is now on the right track and I’m confident that the StaRUG process can also be successfully completed soon,” says Meyer. “In the last few weeks and months, I have witnessed first-hand how everyone involved struggled over the measures and made the consistent, absolutely necessary cut in the retail business anything but easy in view of the jobs to be cut.” The course that has now been taken is the only way for Gerry Weber to position itself for the future, the restructuring expert continued.