The second hard lockdown due to the Corona crisis is leaving its mark. Because of the ongoing closure of all German branches, a popular German fashion chain is about to go bankrupt. Only bankruptcy proceedings can save them now.
In the first lockdown in March and April 2020, stationary retail lost a large part of its sales. The doors of fashion retailers in German city centers have been locked again since mid-December. Because shortly before Christmas came the bad news for everyone: The most important business of the year, shortly before Christmas, will be discontinued – Germany is going down again. Adler Modemärkte AG now has to react to this loss and has filed an application to open insolvency proceedings in self-administration due to over-indebtedness.
Adler Modemärkte AG is bankrupt: What are the consequences?
Even if the news about the bankruptcy application sounds dramatic at first, there is a ray of hope for Adler and his employees. The aim should be to reorganize the company with the help of an insolvency plan and to keep it that way. Meanwhile, business operations should continue as before. The board sees this as the only way to survive the new lockdown. It was simply not possible to fill the gap in liquidity with government support funds or money from investors.
Nevertheless, the company was not externally controlled during the restructuring. The board of directors remains authorized to administer and dispose of. However, the lawyer Christian Gerloff was appointed as a general agent to monitor the processes. By filing for insolvency, Adler Modemärkte AG is initially protecting its 171 stores, 142 of which are in Germany, as well as the associated online shop.
Not only Adler Modemärkte AG is stumbling because of the pandemic. Many other companies are also affected: