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Provisional insolvency of Neckermann: Chances of saving the company are fading

12/09/2012

Frankfurt – The chances of survival for mail-order company Neckermann are fading. The provisional outcome of the search for investors conducted jointly with auditing firm Ernst & Young over a period of eight weeks suggests that many investors feel the challenges associated with acquiring Neckermann are too complex. The employees were informed of the difficult situation at a meeting today.

Insolvency administrator Joachim Kühne said: "We will continue to make every effort to find a serious investor by the end of September who is willing to carry on the business as a going concern. Having said that, the company's position is becoming increasingly bleak."

He added that the provisional insolvency administrators intend to continue fighting for the survival of the company together with the advisors from Ernst & Young, the staff and company management, as well as all other parties involved. During the search process, more than 200 interested investors have so far been contacted. Some 50 potential investors have examined the company and scrutinised its business situation.

On 19 July, Frankfurt Local Court appointed law firm CMS Hasche Sigle to act as provisional insolvency administrators for neckermann.de GmbH and Neckermann Logistik GmbH. Partners Joachim Kühne and Dr Michael C. Frege were appointed as provisional insolvency administrators.

In the following weeks, the provisional insolvency administrators did everything to save the company. Neckermann was successfully stabilised. It resumed deliveries of goods, while customers and suppliers were asked to remain loyal. Staff wages and salaries are still being paid by the Federal Employment Agency in the form of compensation for loss of earnings due to insolvency, but only until the end of September.

Investors started looking at the company shortly after insolvency proceedings opened.
"Investors' main criticism is that they believe management had neglected cost control for too long. Everywhere they looked, they came across clear evidence of the highly negative impact on the profitability of the business," said provisional insolvency administrator Dr Michael C. Frege. "As the situation gets bleaker and bleaker, the chances of Neckermann surviving continue to deteriorate."

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