- Prachi Singh |
As a result of the renewed officially ordered closure of 169 of the total of 171 stores until at least the end of January 2021, the management board of Adler Modemärkte AG has decided to file an application for the opening of insolvency proceedings in self-administration with the local court of Aschaffenburg. The company said in a statement, despite intensive efforts, the company was unable to close the liquidity gap caused by the Corona-related drop in sales through a capital injection from state support funds or investors.
“The renewed Corona-related closure of almost all stores has unfortunately left us with no other choice. We will do everything in our power to maintain the business operations and to restructure Adler as quickly as possible and lead it into a positive future once again”, said Adler Modemärkte’s CEO, Thomas Freude.
In the first half of 2020, the company added, Adler managed to cushion the first Covid-19-related lockdown on the back of solid balance sheet structure and the securing of comprehensive financing commitments. The aim is to financially restructure Adler Modemärkte AG by means of an insolvency plan.
After a drop in sales due to the first lockdown in the months of March to May 2020, ADLER had seen a noticeable recovery trend in the third quarter and well into October 2020. However, the renewed restrictions on public life since the end of October led to significant sales losses. This situation was massively exacerbated by the officially ordered closure of all stores in Austria in November and, since December 16, also in Germany. Even the focus on maximum cost efficiency and liquidity generation initiated by the management board could not prevent the insolvency application.
Adler Mode GmbH, Adler Orange GmbH & Co. KG and Adler Orange Verwaltung GmbH, each wholly-owned subsidiaries of Adler Modemärkte AG, today also resolved to file an application for the opening of insolvency proceedings in self-administration at the local court of Aschaffenburg.