Gerry Weber International AG, the parent company of German womenswear brand Gerry Weber, has entered preliminary insolvency proceedings after talks with its finance partners broke down.
The womenswear brand said the preliminary proceedings had become “inevitable” after negotiations attempting to find permanent group funding failed.
It will now seek to restructure the business by closing 230 stores and cutting up to 900 roles in Germany and internationally. Under the preliminary insolvency proceedings, Gerry Weber will be able to carry on operating and the managing board remains in office.
“By entering the preliminary proceedings under self-administration, we are now gaining the flexibility to press ahead with the initiated measures of restructuring”, said Florian Frank, member of the executive board of Gerry Weber International AG and chief restructuring officer.
“We are benefiting from the fact that over the past few months we have been able to prepare the necessary structures in the financial sector in order to ensure successful management of the company with the greatest possible transparency. We will continue to work hard on this.”
In June, Gerry Weber predicted that it will slump to an EBIT loss of up to €10m (£8.8m) for its full year, compared to a previous prediction of a €10m (£8.8m) - €20m (£17.5m) EBIT profit.
The group has approximately 1,230 company-managed stores and sales spaces, approximately 2,480 shop-in-shops and 280 franchised stores worldwide as well as brand online-shops in nine countries. It employs around 6,500 people worldwide.