Premium kitchen brand Poggenpohl has started insolvency proceedings in Germany as it becomes the first high profile kitchen brand to collapse under the coronavirus market downturn.
Administrators were appointed this week and said parent company Poggenpohl Möbelwerke GmbH has seen a ‘considerable decline in orders and sales since the outbreak of the Covid-19 pandemic’.
The company will continue to trade and the search for new investors will begin immediately. Salaries of the 270 employees for the months April to June 2020 is to be secured in the short term by insolvency pre-financing.
The rapid drop in business caused ‘liquidity bottlenecks’ which could not be eased with changes in working hours or reducing production and, as the company was in the middle of restructuring, it cannot take advantage of any German government aid.
In a letter to retailers, including dealers in the UK, managing director Gernot Mang stresses that the company will continue to trade as it looks for a buyer.
“We would like to reassure you that insolvency does not mean the Poggenpohl story is over and that our working relationship has come to an end,” he says. “On the contrary, we aim to keep the company and the Poggenpohl brand going and to place even more focus on you, the independent dealers and distributors, as our most important sales channel.
“Our relationship with you is crucial for the success of this [search for investment]. Even more so, it is an essential element of getting Poggenpohl back on track. We are therefore asking you to stick with us during these difficult times and for us to continue on this path together.”
According to the administrator’s initial statement, despite industry rumours to the contrary, Poggenpohl’s business had recently been relatively stable.
It says that following the restructuring of the company over the past two years, the company consistently pursued a multi-channel sales strategy that focused on independent dealers as its most important sales partners.
“Other important sales channels include the company’s own flagship stores, retail outlets, kitchen studios and project business with larger construction units. In addition, Poggenpohl had successfully strengthened its distribution network in Asia by setting up a joint venture for sales at the end of 2019.
“As a result, the order books for the second half of the year are also well filled. As part of the insolvency proceedings, the aim will therefore be to continue the restructuring of Poggenpohl and preserve the company as well as the brand.”