End of the road for 130 Praktiker stores

The insolvency of DIY chain Praktiker has been the big retail collapse of the season in Germany, and as such has attracted a lot of attention (including in these pages) as investors try to draw parallels with, and lessons from, similarly-structured business models that can lead to painful investment losses.

As things stand, according to Praktiker’s preliminary insolvency administrator Christopher Seagon in Hamburg, 130 of the Praktiker stores across Germany are due to start closing their doors next week. No offers have been received to take over the chain, at any price, although there has been good demand for many of the individual stores to be operated under different brand names.

Praktiker’s more upmarket DIY subsidiary Max Bahr, by contrast, has received several takeover offers from private equity groups, and the future for its staff and 132 outlets looks much healthier. The number includes 54 of the better-performing Praktiker stores, which have been re-branded in recent months since the chain’s insolvency.

A report in the Frankfurter Allgemeine Zeitung suggested that in addition to an offer from DIY competitor Hellweg, the supermarket chain Globus had also tabled a non-binding offer for Max Bahr. The Saarland-based Globus operates 46 supermarkets and 77 DIY stores in south-west Germany, as well as in Russia and the Czech Republic.

According to business magazine Wirtschaftswoche, the Dortmund-based DIY chain Hellweg, which had already established a common purchasing alliance with Praktiker, is also trying to stitch together a consortium to bid for the healthier (but still insolvent) Max Bahr grouping. The consortium is said to include former Max Bahr CEO Dirk Möhrle, the Wuppertal-based Einkaufsbüro deutscher Eisenhändler EDE and the British home improvement chain Kingfisher, along with support from the Trautwein family (owners of EDE) whose Etris Bank has been the one institution keeping Max Bahr alive.