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German DIY giant Praktiker files for insolvency

Published: 15 July 2013
Praktiker, Germany's third-largest DIY chain, has filed for insolvency, a victim of mounting losses and the withdrawal of short-term credit guarantees by its banks.
German DIY giant Praktiker files for insolvency
The company operates some 430 outlets in nine countries, and there is speculation now that B&Q owner Kingfisher could be interested in taking over some of the stores. Around 18,000 jobs are at risk as a result of Praktiker's failure.

Praktiker, whose retail fascias include Max-Bahr and Extra Bau + Hobby as well as Praktiker, turns over around €3bn but has not made a profit for years. And this year's exceptionally cold spring in Germany did not help the Praktiker stores, where "business fell off a cliff", according to its chief executive.

Troubles at the debt-laden group mounted after the breakdown of a planned sale of a stake in its Luxembourg Batiself business, which then triggered a need for extra financing.

However, said Praktiker: "Negotiations on additional, initially promising, restructuring finance failed on the evening of July 10 because certain creditor groups did not provide approval for such financing."

The insolvency currently covers Praktiker and Extra Bau + Hobby but Max-Bahr is unaffected for the time being and all stores are continuing to trade.

Praktiker shareholders Alain and Isabella de Krassny said at the weekend that they and other investors were considering buying the banks' loans in an effort to save the company.

Meanwhile, the German media is speculating that Kingfisher - Europe's largest home improvement retailer - could be interested in taking on parts of the group. It already has a 21% stake in Hornbach, Germany's leading DIY warehouse retailer.

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