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Palmers on the verge of collapse: insolvency proceedings cause uncertainty
Palmers files for bankruptcy with debts of €51 million. Search for investors is underway while recovery plans continue.
Palmers on the verge of collapse: insolvency proceedings cause uncertainty
In a dramatic turnaround, Austrian lingerie manufacturer Palmers officially filed for bankruptcy on Thursday. As the ORF reported, the company expects liabilities of around 51 million euros and has applied for self-administration restructuring proceedings at the regional court in Wiener Neustadt. The reasons for bankruptcy are varied and include failure to secure necessary capital inflows in a timely manner, massive market changes and rising interest rates due to inflation, which affected consumer purchasing power.
The situation is extremely precarious: around 515 employees, mostly women, have been waiting for their salaries since January. Palmers has announced that it will work closely with employee representatives to secure outstanding wages using the Insolvency Pay Fund, as announced by the The press reported. In addition, as part of the restructuring plan, it was proposed to pay creditors 30 percent of their claims within two years. If this plan is rejected, creditors would have to settle for a meager 2.2 percent of their claims.
Offers and opportunities
The underwear manufacturer is desperately looking for an investor, although discussions are currently taking place without any concrete information about interested parties. The opening of the restructuring process could offer unexpected opportunities for potential investors, as the company can reduce its debts and reposition itself financially. According to reports, a Turkish investor could already be in discussion, although official confirmation is lacking.
In view of the circumstances, measures to reduce costs and reorient the market are also being sought. Palmers plans to reduce its number of branches from the current 113 to 100, which was already addressed at the general meeting. Despite the tense situation, the company has assured that there are no plans to temporarily cut jobs while the search for a new investor continues.