The largest fashion retailer in Germany is insolvent. Peek & Cloppenburg Düsseldorf applied for a protective shield procedure last Friday. That this step became necessary surprised many in the fashion industry. Until recently, there were no signs that the group was still expanding with new branches and takeovers.
But who is actually behind the family company and what is known so far about the effects of the insolvency?
Which companies are affected?
A protective shield procedure was applied for for Peek & Cloppenburg KG, Düsseldorf, and for Peek & Cloppenburg Retail Buying GmbH & Co. KG. In this type of reorganization process, the company can determine and implement the necessary steps itself; P&C remains in charge of the management, which is accompanied by the reorganization expert Dirk Andres and the court-appointed trustee Horst Piepenburg. However, business in the branches and in the online shop continues.
Other Peek & Cloppenburg companies are not affected, such as the Peek & Cloppenburg company in Austria or the men’s outfitter Anson’s.
Who runs the business now?
The management now consists of CEO Thomas Freude, CFO Steffen Schüller and the restructuring expert Dirk Andres. The company confirmed this on Tuesday.
Online boss Sven Bernhardt, logistics manager Ricardo Carballo, sales manager Melanie Kleemann, HR manager Carolin Schwarz, women’s fashion purchasing manager Henriette Tesch and board member John Cloppenburg are no longer on the management board.
That also seems to be the case for managing director Edgar Hert, whose profile on the LinkedIn careers network already indicates that he is no longer with P&C. According to a report in the newspaper Der Welt, he is said to have planned an interview about P&C’s new strategy on March 13 before his sudden departure. P&C has not yet responded to an inquiry about Hert.
What led to bankruptcy?
According to the company itself, the main reason was the high investments for the online business. A three-digit million amount is said to have flowed here. But the expansion of online activities did not bring the hoped-for income. Added to this were the slumps in sales caused by the pandemic in 2020 and 2021, the effects of which add up to a three-digit million loss, according to P&C.
Concerns about inflation on the part of consumers and rising costs for energy, wages, sourcing and interest would also have had a negative impact. These are problems that the entire fashion industry has been struggling with in recent years, but during this time P&C has not only continued to expand online, but also continued to expand stationary – with branch openings in Brussels and Berlin, for example, and the takeover of the Danish department stores Magasin du Nord.
It is also unclear what role the owners played before the protective shield proceedings took place.
What do the owners say about bankruptcy?
The owner family has “already signaled their basic support,” said Managing Director Thomas Freude in an interview with Wirtschaftswoche. “Everyone involved is certain: Peek & Cloppenburg is so strong as a brand that the company will quickly find a way out of the crisis,” said the manager in an interview published last Friday.
How exactly the ownership structure of the founding family actually looks like at one of the largest fashion groups in Europe is not known. The liable personally liable partner of the insolvent Peek & Cloppenburg KG is a company based in Roermond, Netherlands, which in turn is 100 percent owned by a foundation in Liechtenstein. P&C has not yet responded to an inquiry about ownership.
What does bankruptcy mean for the fashion industry?
As one of the largest fashion retailers in Europe, Peek & Cloppenburg is one of the largest customers of clothing manufacturers. Will the mostly delivered spring goods still be paid for and should the ordered autumn goods be produced? These are questions that many fashion brands are currently asking themselves.
“P&C is one of our biggest customers and we were surprised by the news, but we believe P&C will optimize under the protective umbrella,” Hugo Boss chief executive Daniel Grieder said during a earnings call on Thursday. “Even in the conversations that we have heard, it is P&C’s intention that they continue to do business. Now we have to see how things will continue with P&C Germany, but we are rather confident there too.” Grieder said of P&C’s orders at Hugo Boss: “At the moment we have not received any signal from P&C that we can expect major problems here and we assume (…) that we will support each other here.”
How many jobs are at stake?
Peek & Cloppenburg KG, Düsseldorf employs around 6,800 people, 800 of whom work at the head office and the rest in the branches. Job cuts are to be made primarily in the head office, the 67 sales outlets are not to be affected, nor are they to be closed.
The Peek & Cloppenburg group of companies with all its companies employs a total of around 16,000 people in 16 countries. It includes six online shops and 160 sales outlets. In addition to the P&C branches in Germany, the Netherlands, Vienna and Southern and Eastern Europe, the group also includes the men’s outfitter Anson’s and the Danish department store chain Magasin du Nord.
When can the restructuring process be completed?
The protective shield procedure should be completed by the end of the year at the latest via an insolvency plan, Managing Director Thomas Freude told Wirtschaftswoche. The plan is intended to regulate which creditors are willing to make which concessions. In the coming weeks, detailed discussions will be held with creditors such as suppliers, landlords and financiers and the first restructuring measures will be implemented.