Praktiker is insolvent

The German DIY retailer Praktiker has gone into administration. The foreign companies are not affected at present, and neither is Max Bahr, a marketing channel that is only active in Germany. The insolvency petition applies to eight subsidiary companies, and as the company announced yesterday, the petition for the parent company Praktiker AG will be filed subsequently. Crucial in the end was that the sale of the Luxembourg subsidiary Bâtiself S.A., which had been firmly included in the planning, did not eventuate. However, Praktiker had been ailing for quite some time already, with recent annual sales falling by 6.8 per cent to € 3.55 bn. As a result, in 2012 the group occupied third place alongside its rival Hornbach in the German industry rankings. Insiders believe that the discount strategy practised for years by Praktiker is the cause of its predicament. A rescue plan drawn up last year provided for the conversion of a great number of German Praktiker outlets to the better-positioned Max Bahr channel. Business in all Praktiker stores and those of Extra Bau+Hobby, a smaller sales channel that is also affected, is continuing as usual at present.