Gerry Weber gets two-month reprieve from creditors
today Nov 14, 2018
Gerry Weber has been granted a two-month extension from its creditors on debt facilities that had been due for repayment on 5 November, offering the company a lifeline until January. The troubled clothing specialist said the agreement represents a substantial step in its restructuring strategy.
Additionally, Gerry Weber’s arrangements with its banking partners will remain unaffected and its credit lines will remain open.
It has been a tough year for the German company, which on Tuesday reviewed its financial forecast for the year ended 2017/18 to announce “significant” EBIT losses (compared to a previous forecast of up to €10m losses). The sales target was lowered to €790m, from a previous range of €830m - €840m.
Gerry Weber said the extension of the company’s deadline, plus the continued support of its financing partners will help it stabilise its tense financial situation. It follows the sale of its showroom centre Halle 29 earlier this year, which gave it an extra €36m.
“We are very relieved, that the approval of our outside creditors of a deferment until end of January provides sufficient financial leeway until the end of January, to further drive the urgently necessary steps of our restructuring concept,” said Johannes Ehling, spokesperson for the company.
Florian Frank, member of the managing board and chief restructuring officer added: “Thanks to the cooperation of all financing partners and despite high time pressure we made a substantial step forward towards the stabilization of the company. Now, we must launch the next measures for a sustainable restructuring of Gerry Weber and consequently drive forward the already initiated steps for a new positioning of the group.”
To ensure its survival, the clothing chain is set to cut a “significant” number of jobs in Germany and abroad, as well as across all segments of the group. Several stores are also earmarked for closure, while the brand focuses on improving efficiencies at its logistics centre in Halle, Germany.
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