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Adler Modemärkte AG: Government endangers around 3,200 jobs at ADLER

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DGAP-News: Adler Modemärkte AG / Key word(s): Miscellaneous
04.05.2021 / 09:29
The issuer is solely responsible for the content of this announcement.

Traditional company in intensive restructuring negotiations

Government endangers around 3,200 jobs at ADLER

Federal Ministry of Finance and Federal Ministry of Economics oppose loans from economic stabilisation fund (Wirtschaftsstabiliesierungsfond)

Haibach (near Aschaffenburg), 4. May 2021 - The restructuring of Adler Modemärkte AG, which has been successfull in the textile retail sector for more than 70 years, threatens to fail due to resistance from the government. Thus, the future of the approximately 3,200 employees is uncertain. The Executive Board urgently appeals to the responsible Federal Ministers Olaf Scholz and Peter Altmaier to give up their obstructive position and agree to support from the economic stabilisation fund (Wirtschaftsstabiliesierungsfonds) established by the federal government.

Although the company is in promising and advanced negotiations with several national and international investor groups, ADLER is in danger of running out of money due to the tightened lockdown conditions ordered by authorities as part of the so-called "federal emergency brake" (Bundes-Notbremse). As a result of the further tightening of the nationwide lockdown from 23 April 2021, ADLER requires additional financing of around €10 million. Accordingly, the company has been in close exchange with the responsible parties of the economic stabilisation fund for several weeks. However, the Federal Ministry of Finance and the Federal Ministry of Economics have been reluctant to commit to the confirmation of a loan for ADLER, despite insistent reminders of the resulting consequences for it's roughly 3,200 employees.

The group has been working on a restructuring in the course of insolvency proceedings in self-administration since 12 January 2021. In this context, by securing a mass loan and rigorous cost management, the company had succeeded in ensuring the financing of its operative business up to date, despite the extensive closure of almost all of its over 140 locations in Germany.

"It is dramatic that ADLER, despite the hopes for an ending lockdown due to dynamically rising vaccination figures and falling incidence rates, is now finding itself in an increasingly difficult situation. We are doing everything we can to secure a future for our roughly 3,200 employees. After all, ADLER was a financially healthy company before the pandemic and got into this crisis through no fault of its own." Thomas Freude, CEO of the company, commented.

The Company's aim is to reorganise in line with an insolvency plan developed as part of self-administered insolvency proceedings. The Company has commenced the necessary preparations and is intensively persuing an investor search, and it expects that this preliminary work will continue into June 2021. The Executive Board has appointed the attorney Dr Christian Gerloff, of Gerloff Liebler Rechtsanwälte - a prominent expert on restructuring and insolvency in the textile retail sector - to assist in this process as general representative. The Local Court has appointed the attorney Tobias Wahl, of Anchor Rechtsanwälte, to serve as preliminary trustee.

"It is utterly unbelievable to me that a traditional company like ADLER, with millions of loyal customers, has so far been denied any government support - neither via the economic stabilisation fund nor via the bridging assistance III (Überbrückungshilfe III). This means that around 3,200 employees are facing an uncertain future. The behaviour of the Federal Ministry of Finance and the Federal Ministry of Economic Affairs is diametrically opposed to the federal government's widely announced policy," adds lawyer Dr Christian Gerloff, general representative in the insolvency proceedings at ADLER.

Market-leading position and established business model with millions of loyal customers in the 55+ age group - solid basis for return to profitable growth
Since the Company was founded in 1948, ADLER has become the market leader in textile retailing in the high-purchasing power segment of the 50+ age group with around 9 million very loyal customers. Accordingly, regardless of current developments, ADLER has a promising business model to return to profitable growth following financial restructuring. The Executive Board will continue to push ahead with the measures contained in the strategy programme to establish a completely digital value chain, streamline structures and processes along with further efficiency enhancement measures.

ADLER entered the pandemic with a healthy balance sheet and liquidity at a record high
The example of ADLER shows that in the textile retail sector, even a company that at the end of 2019 had still reported record net liquidity of €70.1 million, a high consolidated net profit and a very solid balance sheet quality can find itself in an existential crisis through no fault of its own and within just 12 months. The lockdowns imposed since March 2020 have seen revenue shrink by approximately € 280 million.

Non-German companies not affected - Stores in Austria and Luxembourg trading again after lifting of local lockdowns; online trading surges by 36%
The subsidiaries in Austria, Switzerland and Luxembourg are not affected by the insolvency. The five shops in Luxembourg (3) and Switzerland (2) are open for business in compliance with strict hygiene and safety standards; this also applies to the majority of the 24 fashion shops in Austria. ADLER customers can currently continue to order the product range via the online shop at www.adlermode.com or via the order hotline 0800-0062010. The popularity of ADLER products among customers is demonstrated by the dynamic growth of 36% that the Group achieved in online retailing in the first three months of 2021.


Adler Modemärkte AG press enquiries and investor relations:
Peter Dietz & Jasmin Dentz
Media und Investor Relations
Tel.: 069 - 97 12 47-33 bzw. 069 - 97 12 47-31
E-mail: investorrelations@adler.de

About Adler Modemärkte AG:
Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2019, the Group generated revenue of €495.4 million and EBITDA of €70.3 million. As at 30 September 2020, ADLER employed a workforce of around 3,350 and currently operates 172 stores, 143 of which are located in Germany, 24 in Austria, three in Luxembourg, two in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m2 of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to more than 70 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 55 and over. For more information: www.adlermode-unternehmen.com; www.adlermode.com

For more information:: www.adlermode-unternehmen.com; www.adlermode.com


04.05.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

Language:

English

Company:

Adler Modemärkte AG

Industriestraße Ost 1-7

63808 Haibach

Germany

Phone:

+49 (0) 6021 633 0

Fax:

+49 (0) 6021 633 1299

E-mail:

info@adler.de

Internet:

www.adlermode.com

ISIN:

DE000A1H8MU2

WKN:

A1H8MU

Listed:

Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange

EQS News ID:

1192058


 

End of News

DGAP News Service

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