Bankruptcies in 2023: These industries have the biggest bankruptcies

The most prominent symbol of the current wave of bankruptcies is in Hamburg. The unfinished Elbtower towers above the Elbe bridges that lead into the Hanseatic city. The future of the prestigious project is currently uncertain. The construction work has been on hold for weeks, and on Friday the leading German subsidiary of the Signa Group had to file for bankruptcy at the Berlin-Charlottenburg district court.

It is not the first most spectacular bankruptcy of this year. According to a current study by the credit insurer Allianz Trade, the number of major bankruptcies of companies with annual sales of more than 50 million euros has recently risen sharply. In the first nine months of this year alone, Allianz experts counted 45 major insolvencies in the German economy. In the same period in 2022 there were only 26 cases, and in 2021 there were only 17 cases. “Major bankruptcies have returned this year and are heading towards the highs seen in 2020“, says Maxim Lemerle, Head of Insolvency Research at Allianz Trade. There were a total of 58 major insolvencies in the Corona year.

Fashion industry and hospitals affected

The wave of bankruptcies is hitting the fashion industry hardest. Textile companies and fashion retailers accounted for 12 of the 45 major bankruptcies this year. These include the heavyweights Peek & Cloppenburg, the shoe giant Reno and the traditional brand Gerry Weber. Other well-known industry names such as Madeleine, Deerberg and Hallhuber also went bankrupt. Branches have to close and employees leave. Some companies are trying to reposition themselves as part of a restructuring process, others are closing down completely.

Many hospitals are also under severe financial pressure. According to the study, six major bankruptcies occurred in clinics. Others are unlikely to appear in the statistics because they are just below the sales threshold that is relevant for recording. In this context, the Allianz experts refer to a situation report from the German Hospital Institute (DKI), according to which two thirds of German hospitals described their financial situation as bad or very bad.

There were also major bankruptcies in industry this year. The bankruptcy statistics include five major bankruptcies in mechanical engineering, four in the metal industry and three in the construction industry. A prominent example here is the Württemberg automotive supplier Allgaier, which had to file for bankruptcy in June. Allgaier was sold to a Chinese investor just last year.

The bankruptcy announcement of the telephone manufacturer Gigaset in September also caused a stir. The Bocholt company recently employed 850 people and had sales of 240 million euros per year. One of the biggest bankruptcies in 2023 is the insolvency of the Pforzheim mail order company Klingel, which had sales of one billion euros in 2017. After this year’s Christmas business, operations are scheduled to cease at the end of January 2024. The goods retailer, whose beginnings date back to 1920, recently employed around 1,300 people.

Insolvency cases are increasing overall – but from a low level

If you look not just at large companies but at all companies, according to Allianz Trade there is also an increase in insolvencies, but at a lower level. The construction industry records the most insolvency cases, followed by trading companies and the service sector. For 2024, the experts also expect that restaurateurs could face additional problems as the VAT in the catering industry will be increased again to the normal rate. “Many German companies are well positioned even in these difficult times and have the necessary buffers – but not all of them,” says Milo Bogaerts, head of Germany at Allianz Trade. “If shaky candidates then have to repay or refinance loans, for example from the corona-Time, it can tip over quickly.”

The bottom line is that the credit experts expect that the number of all bankruptcies this year will increase by 22 percent compared to the previous year. “This is the strongest increase since the European debt crisis – but it comes from a low level,” write the Allianz experts. The number of bankruptcies is still below the level before the pandemic. This is expected to be exceeded next year. During the Corona period, the number of bankruptcies fell due to government aid payments and a relaxation of insolvency law. The insolvency experts therefore also speak of a “normalization” of insolvency events.