It was once the largest drugstore chain in Europe. Schlecker’s expansion went well for years. But then the company missed the connection to the market and went bankrupt in 2012.
The name Schlecker was once a household name. In almost every municipality in Germany, the shop lettering with the logo hung at least once, white lettering on a blue background. But very few people knew the face of it.
That changed abruptly when the empire of the drugstore king and self-made man Anton Schlecker from Ehingen near Ulm had to file for bankruptcy. Ten years ago, on January 23, 2012, the time had come. The drugstore group had announced the move three days earlier. Around 25,000 employees in Germany, mostly women, lost their jobs. “There has probably been hardly any comparable insolvency proceedings in Germany in terms of public and media interest,” says the office of insolvency administrator Arndt Geiwitz.
The decline of the Schlecker empire became apparent more than half a year before the bankruptcy. In June 2011, the company announced that it would close around 10 percent of its more than 8,000 branches in Germany. The reason is their insufficient profitability. The problems were homemade. According to the spokesman for the insolvency administrator, Schlecker tried to get even bigger with more and more shops, to achieve more shopping advantages in order to be able to achieve even lower prices. “However, the customers stayed away because the shops were too small, too old and unattractive.” The conversion of what was once the largest drugstore chain in Europe could not be implemented quickly enough because there was a lack of money. “And then the house of cards built for expansion collapsed.”
The Schlecker rescue also fails because of politics
Legendary are the words of Schlecker’s daughter Meike a few days after filing for bankruptcy at a press conference together with insolvency administrator Geiwitz. She is asked why the father did not support the company with money from his private assets. Meike Schlecker moved forward in her chair and replied: “I don’t think you understood that. There’s nothing left.” As a so-called sole proprietor, he was liable with everything he owned. Around 28,000 creditors have filed claims of just over 1.2 billion euros in the insolvency table.
The Schlecker case also becomes a political issue. In March 2012, Geiwitz’s attempt to set up a transfer company for almost 10,000 employees who were about to be laid off failed. The then Federal Economics Minister Philipp Rösler (FDP) rejected a loan from the state bank KfW and referred to the responsibility of the federal states. The FDP economics ministers in Bavaria, Lower Saxony and Saxony prevent society from forming. And Rösler caused additional outrage because he had recommended that the women in the drugstore chain who were laid off should find a new job themselves and described this as “follow-up employment”.
Even ten years after the bankruptcy, Christel Hoffmann, the group’s former head of the works council, is still outraged. “Politicians had slammed the doors at Schlecker. The women employed there were not important to politicians,” says the 68-year-old. In retrospect, Leni Breymaier, who is now a member of the SPD Bundestag and then head of Verdi in Baden-Württemberg, believes that Schlecker’s image was simply too bad. That is why there was no political involvement.
The bankruptcy and the legal aftermath
The former head of the works council worked for the drugstore company for almost 20 years. From Hoffmann’s point of view, the Schlecker family’s major shortcoming was that they were resistant to advice. When she was on the works council, she never saw Anton Schlecker, says Hoffmann. The master butcher, who opened his first drugstore in the 1970s after price maintenance for branded goods was abolished, had to face a wider public during the trial before the Stuttgart Regional Court.
In 2017, Schlecker was sentenced to a two-year suspended sentence for willful bankruptcy. Knowing that bankruptcy was imminent, he had put money aside. He was spared prison. But not his children. Meike and Lars Schlecker went to prison. They were sentenced to two years and seven months in prison each. In the past, the Schleckers had repaid over ten million euros to the insolvency administrator.
In retail, on the other hand, Schlecker’s market shares have long since been redistributed. «The bankruptcy of Schlecker has torn a huge hole. Above all, dm and Rossmann then fought massively for Schlecker customers and fought veritable price battles. It paid off for both of them: In the end, they secured the biggest piece of the pie,” says retail expert Thomas Montiel-Castro from the market research company NielsenIQ.
Is the Schlecker comeback coming?
“The top dog dm was then able to increase its market share from 28.5 percent to over 40 percent, Rossmann from 22.5 percent to 33.5 percent,” reports Mirko Warschun from the management consultancy Kearney. Other drugstore chains, on the other hand, benefited little. And even the major grocers largely got nothing when Schlecker’s market shares were redistributed. “They simply didn’t have enough space in their branches to offer a really competitive range of products in the drugstore segment, and in the eyes of many customers they may also lack competence in this area,” says the industry insider.
Meanwhile, Austria-based businessman Patrick Landrock has announced that he wants to revive the Schlecker brand. So Schlecker should no longer become a pure drugstore, but also appear strongly with products of daily use such as food, office and business supplies as well as hardware store articles. Online sales should start in the first half of the year. The first branches are to follow, this year 50 sales outlets are planned. The start of online sales has already been financed.
Landrock claims to be the Schlecker brand owner. A spokesman for the insolvency administrator says that the rights to the brand could not be sold to a suitable bidder in the course of the insolvency proceedings. “Since the trademarks have not been used since 2012, the insolvency administration – after a note from the German Trademark and Patent Office – deleted them or did not extend the registration.” The insolvency administrator once negotiated with Landrock: “There was no sale at the time.”