Gerry Weber Stores Close as Spanish Firm Takes

The renowned German fashion manufacturer, Gerry Weber, is undergoing a significant transformation. The company has announced the closure of all its approximately 40 retail stores and outlets across Germany.

This decisive move comes as the insolvent brand is acquired by the Spanish fashion firm, Victrix, which plans a strategic relaunch under its own established structures. This marks the end of Gerry Weber’s direct retail presence in its home market, shifting towards a new business model for its continued existence.

Victrix Acquires Gerry Weber Brand Rights

The preliminary creditors’ committee has formally approved the acquisition concept put forth by Victrix, a Spanish family-owned fashion company. This agreement also received the crucial endorsement from provisional insolvency administrator Lucas Flöther.

A New Beginning for the Brand

Under the terms of the agreement, Victrix will take full ownership of the Gerry Weber brand. However, the plan involves the closure of all remaining Gerry Weber shops and outlets in Germany, along with other international locations, over the coming months. The new brand owner intends to sell Gerry Weber women’s fashion in Germany primarily through established retail partners.

These partners will typically carry a diverse range of brands, integrating Gerry Weber into a multi-brand sales environment. This strategy aims to leverage existing retail networks rather than maintaining a costly, independent store footprint.

Years of Crisis and Failed Restructuring

Gerry Weber has faced a challenging period marked by persistent financial difficulties and multiple attempts at restructuring.

Unsuccessful Turnarounds

The company has been in crisis for an extended time. Previous restructuring efforts in both 2019 and 2023 failed to yield the desired positive financial outcomes. Despite severe cutbacks, including the closure of 122 out of its 171 company-owned stores and outlets in Germany in 2023, and the elimination of approximately 450 jobs, the impact of these drastic measures proved insufficient. The intended cost savings did not materialize, leading to the current comprehensive strategy shift.

The Manufacturer’s Disappearance

With the recent acquisition, the original fashion manufacturing entity, Gerry Weber, will cease to exist. Only the brand itself will continue under the new Spanish ownership. Victrix, known for its own fashion brand Punt Roma, will also assume control of Gerry Weber’s production processes.

The financial details of the acquisition, including the exact sum paid by the Mataró-based family company for the German women’s fashion brand, have not been disclosed, as both parties have agreed to maintain confidentiality.

Challenges Facing the German Fashion Industry

Gerry Weber’s situation reflects broader difficulties currently impacting the German fashion sector.

Economic Headwinds and Rising Costs

Germany’s fashion industry is navigating particularly challenging times. Many well-known companies, including department store chain Galeria, fashion retailers Esprit and Sinn, and shoe chain Görtz, have recently filed for insolvency. These businesses are grappling with a complex economic landscape. Consumers are increasingly cautious with their spending due to a weak economic climate, while operational costs for energy, rent, and wages have significantly increased.

Impact on Brick-and-Mortar Retail

The situation is especially precarious for the traditional brick-and-mortar textile and fashion retail sector. This segment suffered substantial losses during the pandemic lockdowns. Although business saw a recovery afterward, it has yet to return to pre-pandemic levels. The combination of reduced consumer confidence, rising operating expenses, and ongoing shifts in purchasing behavior continues to place immense pressure on the industry.

A Strategic Alignment for Victrix

Victrix Group’s management views the acquisition of Gerry Weber as a strategic fit for their portfolio.

Expanding Market Position

“Gerry Weber fits perfectly to our core brand Punt Roma,” stated the Victrix Group’s management. They believe this acquisition will allow them to “expand our position in the upscale mid-price segment, especially in Central and Eastern Europe, where Gerry Weber has high brand recognition.”

The plan is to ensure a seamless transition for both retailers and end-customers by swiftly integrating Gerry Weber’s production and operational processes into Victrix’s existing structures. This move aims to leverage Gerry Weber’s established brand equity in key markets while optimizing its operational model for future growth.