Plummeting department store sales amid business-wrecking coronavirus lockdowns and market uncertainty have driven Sioux Group’s wholesale division off the rails.

Sioux GmbH, the subsidiary that deals with shoe retailers, filed last week for self-administration proceedings under the German insolvency legislation after being dealt an unsettling blow by the pandemic. Thomas Rittmeister was appointed as a provisional administrator by the law firm Reimer RechtsanwälteLewin Berner remains managing director of Sioux GmbH and chief executive of the group. The move will enable the unit to undergo a self-administered reorganization.

Sioux Group’s five other companies, including the e-commerce subsidiary Sioux Online GmbH, are not affected by the bankruptcy. While the specialist retail business is taking a beating, with sales expected to plummet by 30 percent, Sioux Group’s online business is thriving, with the sister company behind the online store posting strong growth.

After two strong months in January and February, starting from March business with retailers came to an almost complete standstill because of the lockdown, and did not recover until mid-June, according to the company. The easing of lockdowns failed to produce the desired effects for Sioux’s retailer partners, the majority of which have suffered a 30-40 percent drop in sales. Meanwhile, many of the Group’s retail partners have filed for bankruptcy, including the department store group Galeria Karstadt Kaufhof and the footwear retailer Dielmann, or are at risk of insolvency. According to Berner, this negative trend could accelerate in the second half of the year.

According to the group, a key factor in its bankruptcy filing was that financial aid from the state development bank Kreditanstalt für Wiederaufbau (KfW) did not materialize. The group now aims to draw up a restructuring plan that will allow it to develop a sustainable future perspective for Sioux GmbH.

Sioux Group was established in 1954 in the town of Walheim, in the Southern German state of Baden-Württemberg. Sioux GmbH employs 35 full-time workers and generated sales of around 24 million euros in 2019.