The management of Salamander, which is being reduced from three to two members, indicates that between 50 and 60 of the chain’s 100-odd stores in Germany will have to be sold or closed to achieve a satisfactory level of profitability that will make it sufficiently attractive for a new investor. That should include the sale of 18 leasehold properties.
As previously indicated, Salamander’s other 130-odd stores in other European countries are profitable already. Numerous candidates all over Europe and also from Asia have expressed interest in those foreign stores, which are generally trading in excellent locations, but the receivers of Salamander, which went into Chapter 11 bankruptcy a few weeks ago in the wake of that Garant Schuh + Mode, want to sell it as a total package.
In a previous round of talks, before Garant took over Salamander one year ago, potential investors had balked at the cost of laying off the chain’s employees in Germany, most of whom have put in many years of service. Germany’s insolvency regulations make the cost of such layoffs and of cancelling leases more affordable, easing the financial recovery of lame-duck operations.
The company has already stated that it wants to terminate the contracts of 396 of its 900-plus employees in Germany, including store personnel and administrative employees. Furthermore, Andreas Körbel will leave the position of Salamander’s general manager in charge of purchasing, marketing and sales after only a few months in the job. The other two general managers, Benno Siebert and Norbert Breuer, will take over his responsibilities, with Siebert, a former Garant executive, handling buying and Breuer handling marketing and sales.
Meanwhile, Garant reports that it is beginning to persuade some key suppliers, including Clarks and Shoe Fashion Group Lorenz, to work again together with the German buying group for centralized invoicing and settlements, in spite of its bankruptcy proceedings and the fact that it has not yet paid many of the bills which had fallen due in August and September. An affiliated buying group, Rexor, has told its clients that they will have to wait a bit longer for that, too.
On the other hand, Garant is gradually pulling away from the broad sporting goods sector. The DZB bank of Ariston-Nord-West-Ring has signed an agreement to take over central settlements in behalf of Sport 2000 in France from Garant, and its own Sport 2000 subsidiary in Germany has started to negotiate the accession of more than 20 former members of Garant’s Fair Play subsidiary in Switzerland. The negotiations are still on with SED, a buying group in France which is 49 percent owned by Garant (more in Sporting Goods Intelligence Europe).