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German industry association warns of new wave of insolvencies and closures

Nov 6, 2023 Germany
 German industry association warns of new wave of insolvencies and closures
The German Trade Association for Textiles, Footwear, and Leather Goods (BTE) recalled that repayment of state aid under the pandemic approach, increasing the pressure on an already struggling sector
According to BTE estimates, on average, sales at the end of September are nominally in the mid-single-digit range above those of 2022, but most are still below pre-pandemic levels. It adds that, adjusted for inflation, the loss in sales, as compared to 2019, is in the double-digit range, which even puts into perspective the 2022 growth. Therefore, the association “is convinced that the sales of many textile and shoe stores are not enough to offset the high-cost increases, in the areas of energy, personnel or rent, for example”.

As the possible repayment of state aid from the pandemic approaches, BTE fears a new wave of bankruptcies will soon follow. The aid includes loans from the KfW (Credit Institute for Reconstruction), a public development bank jointly owned by Germany’s federal government and the country’s regional governments, and the bridging aid (ÜBH) intended to compensate for the sharp decline in sales due to the lockdowns in 2020 and 2021.

The German association calls then on “political decision-makers to provide clear, fair and comprehensible solutions to the controversial questions of bridging aid”, considering that fashion, footwear and leather goods businesses “were by far the biggest victims” of the measures enforced by the Government during the COVID-19 pandemic.


Image Credits: gpsmycity.com

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