Closed Fashion Brand Files for Insolvency: A Look at the Current Situation
Business announces bankruptcy
Hamburg-based fashion brand Closed, renowned for its Italian-inspired premium denim, has recently filed for insolvency due to excessive debt and associated financing costs. Despite these financial challenges, the company's operational structure remains fundamentally profitable across its wholesale, online, and brick-and-mortar retail divisions.
Current Status
The insolvency filing was made with the Hamburg Regional Court, and Stefan Denkhaus was appointed as the provisional insolvency administrator [1][2]. Closed aims for a swift investor process to secure its future [1]. Business operations will continue uninterrupted, with the pre-financing of insolvency benefits initiated to ensure ongoing salary payments for the workforce [1][2]. Approximately 400 employees are affected, and measures have been taken to maintain their employment stability during the insolvency proceedings [2].
Potential Investors and Future Plans
Initial promising discussions with potential investors have begun, with both management and the provisional administrator expressing confidence in finding an appropriate investor [1][2]. Before filing for insolvency, Closed initiated some structural changes, including the appointment of Lothar Hiese as the new CFO to replace Hans Redlefsen [2]. The goal is not only to find an investor but also to maintain Closed as a Hamburg-based company, emphasizing its brand strength and clear profile [1][2].
Financial and Operational Background
Closed achieved significant sales in recent years, with an estimated turnover of about 125 million euros in 2023 [2]. However, financial difficulties, exacerbated by high debt levels, have necessitated the insolvency proceedings [3]. The brand operates 36 stores across Europe, with 26 in Germany [1]. Despite financial challenges, Closed emphasizes its operational profitability in retail and e-commerce sectors [1][2].
Sources: 1. ntv.de 2. dpa 3. Insolvency portal of the federal states
- The potential investor discussions for Closed, currently in financial distress due to high debt levels, might also consider the brand's plans for vocational training, a vital part of their community policy, to enhance their long-term business strategy.
- As Closed, a fashion brand known for its Italian-inspired premium denim, navigates through insolvency proceedings, they continue to prioritize their employees' lifestyle, ensuring ongoing salary payments and maintaining the employment stability of approximately 400 workers, even in this challenging fashion-and-beauty industry landscape.
