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Polish fashion discounter Pepco has filed for insolvency for its German branch. The 64 stores will remain open for the time being, as management wants to reboot the branch after a thorough restructuring.
Disappointing results
Pepco has only been active in Germany for two years, but is struggling with disappointing results. Its 64 stores, especially in East Germany, are facing ongoing losses. During the reorganisation, the locations will remain open and will receive new deliveries: the explicit goal is to restart the branch and make it profitable in a challenging market.
Insolvency manager Christian Stoffler will temporarily take over the leadership of the German branch. He brings a wealth of experience from the fashion and retail sector to the ailing retailer. Stoffler believes in a happy end, saying that Pepco’s concept and assortment has been tried and tested for two decades, and has proven itself successful. He expects that, with the necessary tweaks, the stores in Germany can “find their place in this difficult market”. This legal step should help protect the chain in its most difficult days, allowing management to “take the necessary steps quickly.”
The difficulties in Germany stand in stark contrast to the company’s general European trend: two weeks ago, Pepco announced a record revenue. It was the first time that the Polish group (excluding the divested British subsidiary Poundland) generated more than one billion euros in a single quarter.
