Clothing crisis

Fast Going Out of Fashion

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Joachim Löw does his bit to help Strenesse.
  • Why it matters

    Why it matters

    Consumers are increasingly buying cheap clothes from discount chains or expensive premium labels. These sectors are booming, but it means independent brands are threatened. Many may not survive.

  • Facts

    Facts

    • Between 2009 and 2012, the number of firms in the German clothing trade fell from 26,789 to 24,380.
    • In 2012, a fifth of all German fashion firms had an operating loss.
    • The German department store chain Karstadt, a big seller of independent labels, is considering closing 30 branches.
  • Audio

    Audio

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Back in its heyday, Strenesse, a premium German fashion label, had a famous fan. Joachim Löw, coach of the German national soccer team, wore a blue cashmere V-neck sweater at every international match. And the entire German team was photographed wearing suits by the brand. But those times are now past.

Today, the country’s soccer stars wear Hugo Boss — and in April, Strenesse filed for bankruptcy. Restructuring is now the focus, and the company is desperately seeking outside help.

“What is needed is not a financial investor, but a strategic entrepreneur who takes over the majority,” said lawyer Michael Pluta, who will join the management board at Strenesse as chief restructuring officer, alongside the founder’s son, Luca Strehle. “We have been contacted by a few investors who would be a good fit. But they want to see new figures.”

Financial auditors are examining the company’s 2013-14 business year, which ended June 30, along with the first quarter of the new year.

Strenesse is not an isolated case. Many small German fashion firms are doing badly and earning less and less money. From 2010 to 2012, the average profit share before interest and taxes among German clothing manufacturers fell from 7.5 percent to 4.2 percent.

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