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Dozens of shoe and fashion retailers have gone bankrupt this year. The Görtz chain is trying to restart after bankruptcy. Your case shows which retailers are particularly struggling right now.
The crises of recent years have hit many retailers hard. The corona pandemic and inflation caused consumer sentiment and thus income to fall. This year, more than 85 fashion companies filed for bankruptcy and were no longer solvent: for example Galeria Karstadt Kaufhof, Hallhuber, Gerry Weber, JakoO or Madeleine – these are mainly companies from the mid-price segment.
This cannot currently be overlooked on Frankfurt’s Zeil, Germany’s number 4 shopping street in terms of sales. Rows of shops are closed, doors taped off, signs posted. Not every transaction has had all traces of the previous tenant removed. For example, the old sign for the shoe retailer Görtz still hangs above a shop for decorative items. But he has disappeared from the scene.
Renovation in individual responsibility
In September 2022, Görtz applied for protective shield proceedings for the parent company Ludwig Görtz GmbH as well as self-administration insolvency proceedings for the operating subsidiaries Görtz Retail GmbH and Görtz Logistik GmbH. Görtz cites the war in Ukraine, rising energy prices and high inflation as reasons for the insolvency, which led to “enormous purchasing reluctance in branches and online business”.
But insolvency is not the same as insolvency. Larger companies like Görtz in particular tried to save their companies using modified forms such as insolvency under self-administration. In contrast, standard insolvency is more about the sale or dissolution of a company, explains Sebastian Knapp, an expert in insolvency law. The management remains in office and implements the restructuring measures provided for in the insolvency plan. It can continue to dispose of the company assets even during ongoing insolvency proceedings. However, a so-called trustee has to control the process so that everything goes smoothly and the company stays on track.
The prerequisite for self-responsible renovation is consistent planning, Knapp continues. “A self-administration plan essentially consists of two components: firstly, a financial plan and secondly, a restructuring concept. As part of the financial plan, those responsible must be able to show that a company is fully financed for at least six months under insolvency conditions; as part of the restructuring concept, concrete measures for the implementation of the Redevelopment plan must be presented.”
Vague statements about future plans
The shoe retailer Görtz has made it and is now daring to start again. The registered debts are now forgiven. Instead of the Görtz family, CK Technology Solutions GmbH is now in charge of the shoe retailer at the 150-year-old traditional company. The polo player and businessman Bolko Kissling is behind the name.
But what is his plan? How does he want to continue to run the company? The statements remain very vague and non-transparent. When asked, it says: “The new Görtz concepts ‘Görtz Lifestyle’ and ‘Görtz Boutique’ have clear and separate segments. There will be new product lines and new products here.” Görtz also wants to offer textiles in the future, and considerations are also being given to a delivery service.
More than a hundred Görtz branches closed
What the new face of Görtz will look like and whether closed branches will be reopened is anyone’s guess. The bankruptcy has left its mark on the traditional retailer. Over a hundred branches had to close and several employees were laid off.
Görtz is therefore an example of a general trend. Providers in the middle price segment in particular are struggling. “Cheap” works, as evidenced by the fact that the branches of competitors Primark and Deichmann are still open and well attended. Those who are a little more expensive struggle; Reno, Sidestep and Salamander have also disappeared.
However, if things get really expensive, the business model will continue to work. The branch of the luxury shoe store Ludwig Reiter has been offering its shoes for decades – but they cost between 379 and almost 2,000 euros.