German drugstore chain Schlecker will cut about half its jobs and close half its stores after filing for insolvency in January. Major restructuring is required to breathe new life into the ailing company.
Insolvency administrator Arndt Geiwitz announced on Wednesday that, according to his current estimates, 11,750 workers would have to go to get the company on its feet again. Schlecker currently employs some 30,000 people.
In addition, the number of stores will be reduced to 3,000, down from the 6,000 the company had before it filed for insolvency.
"If we don't follow through these deep cuts, Schlecker will have no chance of surviving," Geiwitz said in a statement in Frankfurt. "Having scrutinized the firm, I found some dramatic details, meaning that many problems had been tackled far too late."
Founder in the firing line
He openly criticized the management led by the company's founder, Anton Schlecker, referring to the company's double-digit million losses in the past few years and a drastic decline in turnover.
Schlecker embarked on a restructuring course in 2010, but in January of this year the management admitted it had failed to secure bridging finance to get out of its plight.
Geiwitz said the drugstore chain must not post losses after regular insolvency proceedings have begun towards the end of March. He said he saw the company's future in city centers and suburbs, but no longer in rural areas.
The chain is to offer more items and reduce prices to become competitive again. Schlecker's subsidiary IhrPlatz, which has also filed for insolvency, is currently not affected by the announced cuts.
hg/mll (dpa, Reuters, AP)