FRANKFURT (Reuters) - Insolvent German home improvement store chain Praktiker PRAG.DE, a household name in Europe’s biggest economy, will be dismantled and sold off piecemeal after its administrator failed to find a buyer for its remaining 130 outlets.
The stores, which have about 5,330 employees, will start a clearance sale in the coming weeks so their empty shells can be sold off individually, Praktiker’s insolvency administrator Christopher Seagon said in a statement on Wednesday.
Labor union Verdi said the decision was a “devastating catastrophe” for Praktiker’s workers as it was unlikely that any new owner would keep them on.
Praktiker filed for insolvency in July after talks with creditors failed, triggering fears of heavy job losses.
Administrators have kept the business running while reviewing options for the chain, whose blue and yellow-branded stores selling paints, tools and gardening products are a familiar sight in Germany’s out-of-town shopping centers,
Its more up-market brand Max Bahr, which is also insolvent, has attracted indicative offers from both strategic and financial buyers, Seagon and Max Bahr administrator Jens-Soeren Schroeder said.
Some of those bidders have expressed interest in picking up a few individual Praktiker stores as well, as have some rivals and other potential buyers, the statement said.
A source earlier told Reuters that those companies will now be given access to Praktiker’s financial data, with any deals to be made by the end of September.
The Praktiker group’s most recent published financial data showed a year-on-year net debt increase of more than a quarter to 535 million euros ($704 million) by the end of March. At the same time, its liquid funds shrank by almost 29 percent to 51.3 million euros.
($1 = 0.7601 euros)
Reporting by Maria Sheahan, Alexander Huebner, Sabine Wollrab and Peter Dinkloh; Writing by Marilyn Gerlach and Maria Sheahan; Editing by Philipp Halstrick, David Goodman and Louise Heavens