Retail under pressure - Deko-Kette applies for insolvency in self-administration
The Deco Depot dealer is widely found in many inner cities - now the company based in Franconia has filed for insolvency in self-administration. The Aschaffenburg District Court granted a protective shield procedure on Monday for the retail company named Gries Deco Company GmbH and appointed a preliminary trustee and a preliminary creditors' committee, as a court spokeswoman confirmed.
The insolvency protective shield procedure is intended to protect troubled companies from creditor access. The business management can continue to run the company responsibly and independently restructure. However, they will be assigned a lawyer as a so-called trustee.
Depot chain nationwide
The branches of the Deco and Furnishing retailer Depot can be found in many German inner cities. However, the chain based in the Franconian Niedernberg with its 500 stores has had difficulties in recent years.
After the entry of the Swiss trading giant Migros in 2009, Depot pursued an aggressive expansion course. The number of stores grew from 109 to 500, sales soared, but profits did not keep pace. In fact, the company was incurring losses. In 2019, Migros sold its 90% stake in the home accessories provider to the current managing director and grandson of the founder Christian Gries. He had previously held a 10% stake in the company.
According to company statements, the Gries Deco Company GmbH last generated sales of around 390 million Euro. No statements were made about profits or losses. The company employed approximately 4,400 employees and had more than 300 branches in Germany.
There will be a plan by the end of the year
"We will approach all stakeholders – of course, especially employees, landlords, suppliers, and business partners – and discuss the next steps together," said Christian Gries in a statement.
The business operations of the company are to continue uninterrupted. The salaries and wages of German employees are secured until September. The goal is to have a plan for the restructuring of the company by the end of the year.
For the 34 Depot locations of the group in Switzerland, the protective shield procedure is expected to have no significant impact. For the locations in Austria, it is intended to continue operating a large part of them.
- The insolvency filing has not affected the Deco Depot's presence in many German inner cities, including Bavaria's Inner City.
- Self-management during insolvency allows the Gries Deco Company GmbH to manage its business affairs with the guidance of a preliminary trustee appointed by the District Court in Aschaffenburg.
- The Shield procedure granted to Depot aims to safeguard the company from creditor pressures, enabling them to restructure responsibly.
- Depot's retail operations extend beyond Germany, with a strong presence in various Swiss Inner Cities, such as those in the Canton of Zurich.
- In Austria, Depot stores continue to operate, providing consumer goods to residents and visitors alike.
- As the insolvency proceedings unfold, the court-appointed JudgeSpeaker will oversee the process in the District Court, ensuring fairness and legal compliance.
- Retailers like Migros and Deco Depot have significantly influenced the retail landscape in Germany, offering a wide range of consumer goods to Franconia's City Centers.
- The protective shield procedure will allow Depot to apply measures for cost reduction, revamping outdated business models, and streamline operations, ultimately leading to a more sustainable future.
- In the meantime, consumers in Germany, Switzerland, and Austria can continue shopping at Depot and Migros retail stores, enjoying the diverse selection of consumer goods on offer.
