Palmers is Insolvent and Files for Reorganization Proceedings

The goal of the reorganization procedure is to ensure the continuation of operations, according to a statement from Palmers. The insolvency was necessary because required capital inflows did not occur in time, the company explained. The liabilities amount to approximately 51 million euros. Palmers employs around 500 people in Austria.

Palmers Insolvency: Required Capital Did Not Flow in Time

"For a positive continuation forecast by the end of January 2025, significant liquid funds would have been necessary in a timely manner," the company writes. Although an investor is currently being sought, according to the information, none could be found quickly to participate in the financing. However, Palmers is confident that the ongoing investor talks can still be successfully concluded and that the company can be "brought back on a successful course in the medium term" with a reorganization procedure.

Currently 113 Palmers Branches and 539 Employees

No further details about potential investors were disclosed in today's release, but the talks are still ongoing. Palmers is confident that these can be successfully concluded in the medium term. The reorganization procedure is also intended to bring the company "back on a successful course." The restructuring and reorganization measures that were started last year, aimed at reducing costs, increasing profitability, and repositioning the brand, will also be pursued by Palmers to finance the reorganization. It was announced at that time that the number of branches would be reduced from 120 to 100. Currently, the company still has 113 own branches and 539 employees in Austria. Additionally, there are 35 branches operated on a franchise basis that are not affected by the insolvency. According to the company spokesperson, no further locations are to be cut as part of the reorganization, apart from the already announced reduction of 20 branches. Personnel is also not expected to be reduced for the time being. So far, the employment relationships of the employees continue as normal, the GPA union announced on Thursday. On Friday and Monday, employees are to be informed about further steps in online company meetings.

Palmers Reports Layoffs to AMS

At the beginning of February, the company "provisionally" reported layoffs to the early warning system of the Public Employment Service (AMS), but it was simultaneously announced that it was not yet clear whether and to what extent there would be job cuts. However, there have already been problems with the payment of salaries, as wages and salaries have been outstanding since January. Palmers is in contact with employee representatives and is "working intensively on a timely payment of the outstanding salaries for the more than 500 employees through the insolvency compensation fund," according to the company.

Palmers Recorded a Loss of 14.7 Million Euros in 2023/24

In the 2023/24 financial year, the loss more than tripled to 14.7 million euros. Revenue fell from 71.5 million to 66.6 million euros. In the middle of the year, Palmers also has to refinance high million-euro loans. "A key assumption for the positive continuation forecast is the negotiation of the loans due on 30.6.2025 amounting to 14.418 million euros (COFAG)," it was stated in the company's annual report in the fall.

(APA/Red)

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