Alno AG has reassured dealers that business remains “unchanged”, despite filing for insolvency on July 11.
The application for reorganisation with self-administration has been made for the companies Alno AG, Wellmann GmbH and Logistik & Service GmbH.
“All other subsidiaries in Germany and abroad, including Pino Küchen GmbH, are not affected by the application,” it said in a statement. “Alno AG’s Board of Directors wants to continue the reorganisation measures initiated at the beginning of the year and secure the turnaround.”
According to the German kitchen giant, the board of directors had to put forward the application for self-administration to Hechingen Local Court, despite seeing “operational successes” brought about by its restructuring measures.
The decision was also made due to the high financial liabilities and the interest payments involved, and the failed negotiations held with potential investors and creditors.
The restructuring measures implemented within the Alno group at the start of the year are “bearing fruit”, it said, and have seen the deficit in Germany fall by €8.7 million (£7.7m) – from €10m in 2016 to €1.3m by the end of May 2017.
Alno AG said it now hopes to take advantage of the benefits introduced by the ESUG in 2012 – German Act on the Further Facilitation of the Restructuring of Businesses – and continue business operations after completion of the restructuring measures.
The affected factories represent 22.5% of Alno UK purchases and the UK subsidiary has confirmed that orders will not be impacted by the restructure.
In a statement it said: “Alno UK has a long-standing reputation and successful trading history through its UK retail, franchise and contracts divisions. It will proceed as normal with the continued support of its business partners. The affected German factories are still operating, orders are continuing to be fulfilled and taken, and Alno UK’s direct relationship with its logistics supplier means that its delivery process is also unaffected.
“The Alno UK directors are doing everything possible to facilitate a smooth continuation of service for its business network and consumers.”
But Sven Herden, Häcker’s UK managing director, claimed it was unlikely the UK business would be completely unaffected by the insolvency.
“In my opinion this will have an impact on all their customers,” he said. “The UK subsidiary might not be officially affected by the insolvency but from whom are they buying their kitchens? However, I don’t think the name Alno will totally disappear, but I’m not sure about Wellmann.
“The German insolvency proceedings enable companies that are heavily indebted to reduce or do away with all debts. Let’s hope for the best for the employees whatever that will be.”