Do German insolvencies point to wider malaise?

Revelations that four German kitchen brands have called in administrators have led to claims that more of the country’s suppliers could be facing financial problems.

Last week, German-based kitchen manufacturers Zeyko, Allmilmö, and Nolff all filed for insolvency.

Part of the La Cour Group, the companies admitted they wanted to use the provisions of insolvency law to carry out a “restructuring” of the businesses in an “ever more difficult competition environment with steadily rising cost pressures”.

Meanwhile, just days later, niche German brand Nieburg also filed for insolvency.

But speaking exclusively to kbbreview, David Messenger, a designer with leading UK retailer Kitchen Elements, said the news only served to highlight how German kitchen companies had become skilled in hiding their true financial positions.

“Germany is very good at keeping going, not advertising the negatives but talking very much about the positives,” he claimed. “Certain other kitchen manufacturers are not in as good a position as they should be.”

“The insolvency status is very normal in central Europe,” Messenger explained. “These companies continue to trade normally, delivering orders, while behind the scenes everyone is trying to find solutions to the specific problems. Sometimes with success, sometimes not.”

He insisted that while many German kitchen manufacturers perform well – citing the examples of Nobilia, Häcker, Schüller and Leicht – others are struggling.

Störmer managing director Bodie Kelay agreed that, while he was sad to hear the news, it was unsurprising, as this is how Zeyko and Allmilmö first became part of the La Cour Group.

However, he claimed that the industry needed the design styles and expertise that these brands bring to the market.

“As two premium furniture manufacturers with very large production sites, competing with similar brands at this price level takes significant marketing budgets over many years,” he said. “I imagine neither Zeyko nor Allmilmö have access to this level of brand investment.

“In an ideal world, one option would be the continuation of both brands by amalgamating the production sites into one, and closing or selling the other. They have the facilities to do this and were already cooperating on some production processes. One thing is for sure, we need the design styles and expertise that Zeyko and Allmilmö offer high-end consumers and I for one would miss the annual visit to MOW to see what Zeyko’s latest developments are for the coming year.”

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