After the Benko bankruptcy - Signa subsidiary SportScheck files for insolvency
Sportscheck, the sporting goods retailer belonging to Signa-Holding, has filed for insolvency. The company, which has 34 stores nationwide and annual sales of around 350 million euros, announced that Sportscheck is insolvent following the Signa Holding's application for insolvency. The management will apply for insolvency proceedings at the Munich Local Court in the course of Thursday.
Takeover of SportScheck by British fashion retailer still possible
The takeover of Sportscheck by the British fashion retailer Frasers Group announced in October will now "not be completed for the time being; however, Frasers is sticking to its takeover plans", the company announced. At the time, the new owner promised to invest in the store concepts, online business and relationships with brand manufacturers. Other potential investors have expressed interest in taking over Sportscheck, and the process is now open again. "This makes Sportscheck confident that it will find a new strong partner that will ensure long-term stability for the company."
All stores, customer service and the online store will continue to operate as normal. Managing Director Matthias Rucker said that the insolvency was bitter, but also an opportunity to strengthen the company with its contractual partners and creditors in the long term. The restructuring and investor process should be completed by March at the latest. Sportscheck has only been part of Signa Retail, the department store division of Austrian real estate investor René Benko around Galeria Karstadt Kaufhof, for a good three years. In 2020, he took over Sportscheck from the mail order company Otto.
There is new bad news from Austrian billionaire René Benko's retail empire almost daily. His group of companies is collapsing more and more. On Thursday it was Sportscheck, which is in urgent need of investment in its business model. The company had already been unprofitable for years during the Otto era. Signa had announced an investment offensive at the time of the takeover and wanted to drive sales to 400 million euros by 2025. However, following the insolvency of Signa Retail on Wednesday, there is now a lack of money.
Sportscheck is struggling - in contrast to its booming competitors - with a whole range of problems. First and foremost, the company missed out on digitalization for many years. Now it is fighting for new, young customers with its own online store and wide-reaching influencers such as David Schönherr and Robert Farken. On the other hand, Sportscheck is in a complex relationship of dependency with major sports brands such as Adidas and Nike. These demand enormous purchase volumes with comparatively low margins - at least compared to smaller competitors such as Brooks, Saucony or Asics. Local specialist retailers therefore often do without Nike and Adidas in their stores. On the other hand, they naturally attract a wide audience - even if they only sell their volume models and not their top products to third parties. Sportscheck has therefore been working for some time on better relationships with manufacturers in order to improve margins and product selection. But this takes time and involves start-up costs.
Apparently last cash injection in September
This is another reason why Sportscheck's liquidity was already at risk in September. According to insiders, however, Signa gave Sportscheck one last cash injection in order not to jeopardize the deal with the Fraser Group, reports "Handelsblatt". The deal was originally due to be completed in the first quarter of 2024, but there was no time until then following Signa's insolvency.
Signa Retail applied to the court for creditor protection on Wednesday. The aim is to separate the company and liquidate it in an orderly manner, the company quoted its Chairman of the Board of Directors Christian Wenger as saying. The business is to be wound up in an orderly and transparent manner, independently of the insolvencies of the rest of the Signa Group. The Board of Directors expects to be able to settle all external liabilities and to sell the parts of the company in a well-organized and structured manner in the coming months.
Editor's note: This article was extensively updated and supplemented after its initial publication.
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Source: www.stern.de
