Germany long was held up as the model for business efficiency in Europe. Even as problems among southern European Union members first began to bubble over, the business community looked to the Germans as the likely salve to the problem, not just in bailout money but in production, efficient management and consumption by its natives. But, on top of stumbles by others in the retail sector there of late, this week came the headline-grabbing insolvency filing of mail-order retailer Neckermann.
Neckermann reportedly was working on garnering concessions from creditors, but they fell through. Some 2,000 jobs could be lost as part of the retailer’s collapse, and it led many to jump to the conclusion that the EU debt crisis is the primary culprit for the ills of this company and others who have found it tough to stay afloat.
Ben Deboeck, country and sector risk coordinator for Belgian-based Ducroire Delcredere, told us this week that it’s worth noting Neckermann was in trouble for a long while, and that it was potentially unfair to pin its failings entirely on the larger debt crisis. That said, such instances of insolvency could be part of an increasing trend pending on how the EU responds to troubles with members such as Greece, Spain and Italy.
“Given the current sluggish economic environment, it should of course be of little surprise that weaker companies, even in stronger countries such as Germany and the like, are heavily exposed to the current downturn,” said Deboeck, who keynoted FCIB’s Annual International Credit and Risk Management Summit in Hamburg. “I guess the Peugeot/Citroën problems are probably a better example of the direct fallout of the crisis, though, and may be more worrying in regards to things to come for European industries if the downturn becomes really protracted.”
-Brian Shappell, CBA, NACM Staff Writer