Neckermann.de on the verge of bankruptcy

Neckermann.de on the verge of bankruptcy

The end seems dangerously near for German online retailer Neckermann.com. It is rumoured that the retailer will file for bankruptcy next week. In April, owner Sun Capital had announced a reorganization to save the former mail order company, but that has now been called off. The Benelux-branch of the company would not be in immediate danger.

No money for severance pay

The German headquarters announced in an official mailing that the reorganization is infeasible since there are no funds to compensate the 1,380 employees the company wants to dismiss. Also, according to Neckermann, unions better accept their terms, or they will endanger the 1,100 other jobs. Negotiations between the unions, the management and the investor group seem stuck and the company cannot make ends meet.

 

Options are slimming down for Neckermann's German branch, as mail order activities no longer offer a future and restructuring to a modern e-commerce company is deemed to be not feasible. As the management itself declares, Neckermann is anything but appealing for a take over. Even if Sun Capital offered its  as cheap as chips (contrary to the philosophy of private equity funds), buyers would have to invest serious amounts to get the company back on track. Many analysts therefore assume that there is nothing left to do but to claim bankruptcy.

 

Neckermann.com Benelux not involved in German branch

Neckermann.com Benelux states that the problems only apply to the German division of the company. In the Benelux, converting to a full online retailer would be achievable: “Neckermann.com Benelux has decided to shift the focus from a mail order company to an e-commerce organization. A few weeks ago, the Benelux branch announced the reorganization of 150 employees, but contrary to Germany, there already is an agreement with the trade unions concerning the social plan.”

 

Kurt Saelens of Neckermann Benelux added that it is too soon to draw conclusions about the German branch as negotiations are still ongoing: "In Germany, the negotiations about a social plan have recently commenced and are continuing at this time. Expectations are that these negotiations will complete in the next few days.”

 

 

Translation: Sanne Raspoet

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