Peek & Cloppenburg filed for bankruptcy. Although jobs are at risk, stores should not be abandoned.
Announcement
the main thing in a nutshell
- Peek & Cloppenburg filed for bankruptcy.
- The company is now seeking relief in protective shield proceedings.
- Shops should not be closed, but jobs are at risk.
Peek & Cloppenburg (P&C) has filed for bankruptcy. The company is now seeking relief in protective shield proceedings. While no branches are slated to close, a number of jobs are on the line.
However, there should be no reductions in stores. “Insignificant job cuts” are needed only in the administration, as reported by the company.
Peek & Cloppenburg Hamburg, which is independent of P&C Düsseldorf, is not affected by the protective shield proceedings.
Economic ups and downs responsible for bankruptcy
With the help of the protective shield procedure, P&C Düsseldorf says it wants to speed up the restructuring already initiated. In the case of a restructuring bankruptcy option, a court-appointed administrator takes over rescue control. Management retains control but is advised by an external restructuring expert.
P&C emphasized that the move was necessitated by the economic turbulence of the past few years. In 2020 and 2021, the pandemic led to a drop in sales. “The effects hit us hard and cost us three-digit million,” said Steffen Schüler, who has been the company’s CEO since June.
In addition, the consumer behavior of customers is very cautious because of the war in Ukraine.
Various factors continued to cloud the retailer’s financial position late last year. There is talk of shipping bottlenecks, rising costs, rising interest rates and a mild recession.
The online strategy needs to be reviewed
Recently, P&C involvement in online commerce has clearly become a burden as well. To take into account the changed purchasing behavior caused by the pandemic, the company has greatly expanded its online operations from 2021. A three-digit million sum was invested in it.
Customers do not want to buy in this sector either, the company emphasized. Therefore, the company’s online strategy should also be reviewed.
“Our focus is now clearly on our core stationery retail business and therefore our stores. The online space is still an important part of our business model. However, we will act more carefully here than in previous years,” said CEO Thomas Freud.
Also responsible for household chores
Trade expert Gerrit Heinemann of the Niederrhein University of Applied Sciences was not surprised by the P&C development. “Last year, stationery fashion retailers were able to take advantage of people returning to the inner cities. But there are only a handful of fashion retailers who actually managed to return to pre-crisis levels in 2022 and be in the black. P&C Düsseldorf was clearly not one of them.”
P&C suffered not only from the general economic turmoil. Homework problems have also been added. “P&C Düsseldorf messed up the topic of online shopping right from the start,” said an industry expert.
Instead of a well-known name, the company relied online on the newly created FashionID. It didn’t work. By the time you changed course, it was too late.
Is the next bug already following?
Now the company is about to make the next mistake. “The fact that P&C Düsseldorf wants to go online in the future with a handbrake shows that they still haven’t figured out where retail development is going,” Heinemann said.
About 6,800 P&C employees will receive wages from the employment agency over the next three months. Peek & Cloppenburg Retail Buying GmbH & Co. has also applied for a protective shield procedure. KG for the company.
Other group companies in Germany and abroad, as well as sister company Peek & Cloppenburg in Austria, are not affected. They continue their business activities without restrictions. This also affects Anson’s fashion houses in Germany.