Desolate inner cities, 50,000 shops before the end? Trade association fears a massive bankruptcy wave for 2021

The corona pandemic and the lockdown have hit many retailers in the city centers hard.

Many are fighting for their existence.

At the turn of the year, numerous businesses are threatened with the end.

• The boom in

  online retail is

  making life difficult for stationary retailers.

• Many of them could run out of steam in 2021, warns the trade association

  HDE

  .

• Many inner cities are threatened with

  desertification

  .

Munich - The German retail trade is threatened with

an unprecedented wave of bankruptcies

due to the

crisis and booming online

retail

.

With the expiry of the exemption from the obligation to file for insolvency at the turn of the year, "a sudden higher insolvency rate can be assumed," said the managing director of the German

Association (

),

, on Tuesday of the

.

Genth warned that there was a risk of a “historic decline in sales,” especially in “downtown-relevant retail”.

This applies, for example, to "textile, shoe, toy or jewelry retailers"

Many companies there are “at risk of their very existence”.

In total, “up to 50,000

retail

locations could be closed in the next few years,” said Genth with a view to

and the booming online trade.

The development will change "the face of the inner cities profoundly".

Corona: The relaxation of the bankruptcy law expires on December 31

In the fight against the

, the federal government temporarily relaxed bankruptcy law in March.

According to the regulation, which was extended in mid-September, companies do not have to file for bankruptcy in the event of over-indebtedness.

Over-indebtedness occurs when a company's liabilities exceed its assets.

The

is

is intended to give distressed companies air.

Until the end of September, the

suspended in the event of impending insolvency.

According to bankruptcy law, insolvency occurs when a company can no longer pay its bills, wages or salaries.

This reason for bankruptcy has been in effect again since October 1st.

Trade association expects sales growth of 1.5 percent

For the current year, the trade association expects an increase in sales of 1.5 percent to around 551.8 billion euros.

However, there are extreme differences, said Genth.

Online trading is likely to grow by 14.8 percent this year.

In stationary retail, however, the picture is mixed.

While hardware stores, grocery retailers and bicycle shops posted significant increases in sales, revenues in the clothing trade fell by a good third.

Sales figures: There are still big differences between retail sectors https://t.co/ZfUemyYTPX #Retail @destatis pic.twitter.com/Be3L8D53Lr

- HDE trade association (@ trade association) September 30, 2020

Genth was skeptical that stationary retail could reach its pre-crisis level again after the end of the corona pandemic.

It “currently looks like that online shopping has been sustainably strengthened by the Corona crisis,” said the

managing director.