Praktiker AG (PRA)’s Max Bahr do-it-yourself stores filed for insolvency after suppliers lost their insurance cover, joining its home-improvement retailing parent company in bankruptcy proceedings.
Attorney Jens-Soeren Schroeder will be the insolvency administrator for three Max Bahr units and Christopher Seagon will oversee proceedings for a fourth, Hamburg’s higher regional court said in a statement today. Seagon is also the administrator for the Praktiker-branded businesses that filed for bankruptcy protection in mid-July.
Founded in 1879 by Johann Jacob Heinrich Bahr, Max Bahr has 132 stores and 3,700 employees in Germany. Praktiker, which is based in Kirkel, Germany, said earlier this month that Max Bahr wouldn’t be affected by the insolvency. Praktiker said late yesterday that because of a lack of insurance, a “steady supply of goods to Max Bahr stores is no longer guaranteed.”
The filing “is negative for the company, but it doesn’t necessarily mean that all Max Bahr stores will close,” said Anna Patrice, an analyst at Berenberg Bank in London. “It all depends on the company’s majority investors now.”
The reduction in domestic competition will be positive for retailers such as Hornbach Holding AG and OBI Group Holding SE, Patrice said. Praktiker said on July 11 it filed for insolvency after the disposal of a division collapsed. The retailer’s international operations are unaffected, it reiterated yesterday.
Praktiker slid as much as 18 percent to 11 euro cents and were trading down 12 percent at 4:54 p.m. in Frankfurt. The stock, which went on the market at 14.50 euros a share in a 2005 initial public offering, has been trading at record lows since this month’s insolvency filing.
Metro AG (MEO), Germany’s biggest retailer, sold a 59.5 percent stake in Praktiker in the IPO and divested its remaining holding the following year. Praktiker’s current shareholders include Donau Invest Beteiligungs GmbH, with just under 10 percent of the voting rights, and Maseltov Ltd. at 9.6 percent, according to its website.
The insolvency filing is the biggest in Germany’s retail industry since drugstore chain Schlecker went out of business last year, according to Ralf Moldenhauer, a Frankfurt-based partner at Boston Consulting Group.
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