FRANKFURT, Jan 20 (Reuters) - Germany’s biggest drugstore chain Schlecker said it is filing for insolvency after failing to secure funds to keep it afloat while it restructures its business.
“Necessary restructuring measures cannot be implemented as quickly as they would need to be, especially as planned bridge financing did not come through,” the company said in a statement on Friday.
It said its operations would continue and its employees would continue to be paid as part of the insolvency process.
Schlecker has posted losses for several years, and its image suffered from public criticism for its employees’ poor working conditions.
It has since announced plans to shut 700 to 1,000 of a total of 11,000 European outlets, give its remaining stores a more modern look and train managers in how to properly treat workers to help it return to profit this year.
German magazine Manager Magazin earlier this week cited financial sources as saying several funds such as U.S.-based Oaktree were keeping an eye out for a good opportunity to buy into Schlecker.