Germany’s interior decorations retailer Depot faces insolvency struggles, planning to close at least 27 branches by the end of the year. This decision impacts approximately 50 employees out of 3,550, with most expected to be transferred to other branches. The economic downturn in Germany continues, affecting industry exports and home furnishing retailers.
Published on November 24, 2024 by Unknown Author
Germany’s interior decorations retailer Depot plans to close at least 27 branches by the end of the year due to insolvency struggles. The company’s chief executive, Christian Gries, announced this decision in an interview with dpa.
Background
Depot faced difficulties during and after the coronavirus pandemic, which led to a threat of insolvency. In July, the company filed an application for insolvency, allowing for continued self-administration.
Impact on Employees and Branch Network
The planned closure of 27 branches will impact approximately 50 employees out of the total of 3,550. Most affected employees are expected to be transferred to other branches. The number of employees at the company’s headquarters in Niedernberg has decreased from around 650 to 500 since the beginning of the year.
Seventeen branches have already been closed down, reducing the brand’s network to 285 shops. Further closures are likely, and negotiations with some landlords are ongoing. Gries stated that “branches that are not profitable will be closed completely.”
Economic Context
Germany has been struggling with an economic downturn in recent months. The country’s central bank, the Bundesbank, expects the weaker economic phase to continue into the fourth quarter due to headwinds such as China’s slowing economy and corporate bankruptcies.
The outlook for industry exports is gloomy, with high energy prices and bureaucracy weighing on Germany as a business location. Home furnishing retailers in particular are suffering under the poor consumer outlook, with sales almost 14% lower than five years earlier in the first half of 2024.
Company’s Plans
Depot aims to return to regular operations by the middle of 2025 at the latest. The company is working on its product ranges and a new market positioning and considering adding external brands to its product range. Depot generated a turnover of around €390 million ($405 million) last year, but no current profit or loss figures were provided.
Depot also operates shops in other German-speaking countries, including Austria (29 branches) and Switzerland (34 branches). In Austria, the branch network was reduced from 49 to 29 shops this year due to insolvency.
