The praktiker DIY chain is on the verge of going out of business. Negotiations on further financing for the restructuring failed, praktiker announced in hamburg on wednesday evening. Individual creditor groups did not agree to the plan. As a result, praktiker AG is overindebted and insolvent. Praktiker is one of germany's largest DIY chains.
In the short term, an application for insolvency proceedings is now to be filed with the competent local court for praktiker AG and several operating companies. This is the result of a letter from the praktiker board of management to the employees, which was made available to dpa on wednesday evening.
The more profitable subsidiary max bahr and the international business are not affected by the insolvency, as stated in the letter. Group-wide, praktiker has sold around 18.000 employees, almost 7000 of them abroad. According to the company, the group operates almost 430 DIY and home improvement stores in nine countries, of which more than 300 are in germany.
In the red for years
Practitioner has been in the red for years. The DIY group had fallen into a serious crisis as a result of a failed discount strategy and had only been able to secure its financing for the next few years last year.
Chief executive armin burger, who was only installed in the fall of 2012, actually wanted to put the company on a solid footing this year. But praktiker suffered revenue losses in first quarter, losses grew. For the home improvement industry, the reason for the weak figures was the long winter and the resulting delay in the start of the spring season.
Due to the business development, the "positive effects" of the the repositioning has been overshadowed, according to a letter from praktiker's board of directors. "As a result, the group found itself in a tight liquidity situation". It had not been possible to find viable follow-up financing. Thus, sales proceeds that were already firmly planned in the financing concept from 2012 did not flow in. This is how a luxembourg subsidiary was originally to be sold.
Individual companies such as praktiker deutschland, a service company and the brand pearl max bahr are combined under the holding praktiker AG. The aim of the renovation was to convert several praktiker stores to this higher-yielding yellow brand. Praktiker was to serve as a discount store with a reduced range of products.
In the praktiker turnaround, max bahr was supposed to be made the company's main pillar, as praktiker CEO burger had announced. "With max bahr we have earned money year after year, but not with praktiker."