Wilhelm Josten is confident he can still save his company.
Decoration and gift shop Butlers filed to launch insolvency proceedings at the Cologne district court over the weekend in a last-ditch attempt to avoid a full bankruptcy.
“We want to seize the opportunity to continue business as smoothly as possible with the instruments of the insolvency regulation and to reposition ourselves in a competitive way,” said Jörg Bornheimer, a lawyer appointed as temporary insolvency administrator.
Butlers currently employs around 1,000 people. In Germany alone, the chain operates 94 shops that sell home accessories, decoration, furniture and gifts. The Cologne-based company has more shops in Austria, Switzerland and in the United Kingdom.
Butlers founder Mr. Josten said all stores and the online shop will stay open. “We are confident that Butlers will continue to have a good future,” he said.
Things haven’t been always this bad at Butlers. Mr. Josten opened the first shop in 1999, and by 2005 the company already had 50 shops across Germany. This number has grown to 160 in total, in Germany and abroad. The company’s turnover in 2015 was €102.5 million, or $110.7 million, but it made a €12.4-million loss that year.
Mr. Josten said this was the result of a weaker euro, which made imports from Asia costlier, as well as online competition. The increasing popularity of online retail for decoration items and gifts caused a €10-million drop in revenue, he said.
Time will tell whether Butlers can adjust to those new realities if it emerges out of insolvency.