Hundreds of jobs gone

Popular decoration chain also insolvent in Austria

The major sell-off in recent months was the first harbinger - now the end of Depot in Austria is certain.

(Bild: Martin Jöchl)

The wave of bankruptcies in the furnishing industry continues. The Deko chain Depot filed for bankruptcy proceedings in Austria on Thursday and is not seeking restructuring. The bankruptcy affects 349 employees and 110 creditors, AKV and KSV1870 announced. 

Depot has 48 locations in this country. Liabilities are estimated at 15.8 million euros. The German parent company filed for insolvency under self-administration two weeks ago.

The entire sector is struggling
Declining new construction, high interest rates and inflation as well as a general reluctance to buy are currently hitting the furnishing industry hard. The furniture store Interio also slipped into insolvency at the beginning of the year, but is still going strong. Last year, the furniture chains Kika and Leiner were hit, but they were also restructured and are now continuing in a slimmed-down version.

Delays in international supply chains, increased costs and inflation-related consumer restraint are cited as reasons for the bankruptcy.

(Bild: Vergil Siegl)

Inflation probably slowed customers down too much
Depot attributes the insolvency primarily to delays in international supply chains in connection with the current geopolitical crises as well as increased costs in the global transportation of goods, according to the creditor protectors.

Added to this is the slump in customer demand due to the ongoing inflation-induced consumer restraint. Although an online store is also operated, it has not been possible to compensate for the decline in customers in the individual stores.

No restructuring planned for 48 locations
According to Creditreform, Depot Handels GmbH does not intend to submit a restructuring plan, but the sole shareholder intends to acquire some of the stores and the company is therefore to be continued in the short term.

The costs of the continuation are to be financed by the sole shareholder. Depot is wholly owned by the German Gries Deco Company GmbH. The company is currently undergoing insolvency protection proceedings in Germany.

Company grew rapidly but made losses
Following the entry of Swiss retail giant Migros in 2009, Depot pursued an aggressive course of expansion in Germany. The number of stores rose from 109 to 500, and sales climbed dramatically. However, profits did not grow at the same pace; on the contrary, the company made losses. In 2019, Migros sold its 90% stake in the home accessories provider to the previous CEO and founder's grandson Christian Gries. He had previously held a 10% stake in the company.

According to company information, the Gries Deco Company most recently generated a turnover of around 390 million euros. No details of profit or loss were provided. The company had around 4400 employees and more than 300 branches in Germany. For Austria, the "WirtschaftsCompass" reports a turnover of around 49 million euros for 2022.