Restructuring planned

Traditional fashion retailer slides into bankruptcy

The fashion trade is struggling with the dampened consumer mood.

(Bild: stock.adobe.com/NDABCREATIVITY)

Early on Thursday morning, fiber producer Lenzing reported that the market environment remained sluggish. A few hours later, a fashion company in Upper Austria slipped into insolvency. Egger Moden GmbH from Unterweißenbach filed for reorganization. The liabilities amount to 1.32 million euros.

"Fashion and traditional costumes from a good company" is the slogan of Egger Moden GmbH, which operates branches in Unterweißenbach, Rohrbach and Unterweitersdorf. Since Thursday, the future of the family business has been unclear. This is because the traditional retailer from the Mühlviertel region, which was founded in 1884, has filed for reorganization.

Significant losses since corona
According to the creditor protection associations KSV 1870 and Creditreform, the liabilities amount to 1.326 million euros. This compares to assets of 267,000 euros. Until the coronavirus pandemic, the company had only generated positive annual results, but now the financial difficulties were too serious.

What are the reasons for the insolvency? There has been talk of a difficult economic and political situation since the start of the pandemic, as well as changes in purchasing and consumer behavior, which in turn has led to a drop in sales. In addition, energy, rent and personnel costs have risen.

Two stores generate high losses
The stores in Unterweißenbach and Unterweitersdorf are generating high losses, which the Rohrbach location was unable to offset. Egger Moden GmbH could not afford to close the two branches and insolvency proceedings were unavoidable. Now the restructuring is to succeed. The creditors are being offered a 20 percent quota, it is said.