Supermarket giant on brink of insolvency – 3,000 staff and 70 shops

A struggling German supermarket has entered insolvency proceedings in a bid to turn its fortunes around. Feneberg is a family-owned chain based in Bavaria’s Allgäu region that has more than 70 branches, mostly across southern Germany. Founded in 1947, it has been an institution in the region for decades but has fallen on hard times in recent years after racking up a heavy debt burden.

According to German broadcaster Bayerischer Rundfunk (BR) the chain owes around 200 million euros (£173.8million). It was announced on January 9th that the retail giant had filed for insolvency protection proceedings at the Kempten District Court, German news outlet Frankfurter Rundschau (FR) reports.

Feneberg was operating for around three months under what’s known as a “protective shield”, giving companies an opportunity to restructure whilst monitored by the court.

They’ve since been granted self-adminstration, overseen by Managing Directors Amelie and Christof Feneberg alongside restructuring expert Stephan Leibold.

Mr Leibold has stressed that the 72 Feneberg stores will continue to operate and that their suppliers are still delivering to them without restrictions, with business operations carrying on as normal.

Law firm Grub Brugger, which is advising Feneberg says talks have been taken with with potential investors since January.

In a press release on April 9, Grub Brugger says it is aiming to present a viable option within the next four to six weeks, and the focus will be on maintaining the network of branches and protecting as many jobs as possible.

Rewe and Edeka, the two market leaders in the German supermarket sector are among the most promising candidates, Mr Leibold said, as per BR.

However, a complete takeover would present issues under antitrust law, so the two high street giants are likely to only take control of a portion of Feneberg’s stores.

Feneberg reportedly has a workforce of around 3,000 and the future of their jobs remains uncertain as negotiations continue.