As of: March 27, 2024, 8:19 a.m
By: Ulrike Hagen
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The furniture chain Depot is facing a radical restructuring; 90 of the 380 branches in Germany are being put to the test.
Niedernberg – The renowned furniture and home accessories chain “Depot” is in crisis.
The company recently recorded losses and falling customer numbers.
Now owner Christian Gries is returning to management to take drastic measures to get the company back on track, according to a statement from Tuesday (March 26) available to
merkur.de
.
A comprehensive “restructuring agenda” is planned – possibly with branch closures, as was the case recently at H&M and a large bakery chain.
90 stores of the over 300 branches in Germany are being put to the test.
Christian Gries - here at the opening of the Depot flagship store in Munich in 2019 - wants to get his company back on track with radical steps.
© Imago/Spöttel Picture
“Depot” in the crisis: strategic package of measures intended to make companies fit for the future
With over 500 branches in Germany, Austria and Switzerland, including 380 nationwide, Depot is a well-known name for decoration and furnishing needs.
But the company is currently suffering from a loss in sales, which requires “structural changes,” as the old and new managing director Christian Gries explains.
In order to counteract the crisis, the company owner is returning to management after two years with immediate effect.
Gries is receiving support in his plans from Kent Fogh Petersen, who was appointed to the management at the end of 2023, as well as from the restructuring expert and Austrian managing director Rainer Schrems.
“We have to face reality”: consumer restraint caused Depot losses in 2023
“We have to face reality,” Gries told
Handelsblatt
.
In times of persistent inflation, Germany was hit by a wave of bankruptcies in 2023.
At Depot, too, sales last year were only 330 million euros - the bottom line is a loss.
The reason is a clearly noticeable consumer reluctance: “I feel it is my responsibility to personally support the future of the Gries Deco Company,” explains Christian Gries now.
“With my return to management, I would also like to send a signal to our employees, customers and business partners that I will personally do everything necessary to ensure that we remain successfully positioned for the future.” The comprehensive restructuring agenda includes, among other things new shop-in-shop concepts: “An initial collaboration with Bijou Brigitte is proving to be very successful, so the company is holding further discussions with potential partners,” says the statement.
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Depot records losses: branch closures and job cuts planned to save the company
Before Corona, Depot was able to turn over more than 410 million euros.
Around 70 jobs are to be cut at the company headquarters in Lower Franconia alone, as the
food newspaper
reported.
Depot has a total of 3,200 employees in Germany, Austria and Switzerland, of which around 460 people work in administration and logistics.
90 locations under scrutiny: “Hope to keep at least half of the branches at risk”
90 of the slightly more than 300 branches in Germany are now being put to the test.
Among other things, rental agreements will expire or be renegotiated.
“Due to our partnership with our real estate partners, we hope to be able to keep half of the branches,” says Gries.
This is in line with the restructuring process that Schrems initiated at the depot subsidiary in Austria.
Originally, 26 branches were to be closed there, which would have resulted in the loss of 200 jobs.
However, through rent reductions, the number of planned branch closures was reduced to ten stores and the job cuts were reduced to 60 employees.
“Power sale” and sale of the logistics center: Depot announces “restructuring measures”.
In Germany too, the austerity measures are expected to lead to staff cuts, both in the branches and at headquarters.
However, Gries is optimistic: “I am firmly convinced that we can overcome this challenge if we all fight together.” However, this requires a rigorous savings program and concessions from landlords.
In order to generate additional sales and liquidity, the company is planning a “power sale” in the branches, and its own logistics center is also to be sold and half rented.
With regard to financing, Gries emphasizes: “We are fully financed for the next twelve months” – even if the dimensions of the company after the “restructuring” are still unclear.