Praktiker to file for bankruptcy in home country but international operations, Romania included, not affected

Do-it-yourself retailer Praktiker, which runs stores in Romania as well, recently said it will file for insolvency for parts of the group after it failed to sell a division of the group. However, the insolvency should not affect the company's operations abroad. At the end of March this year, Praktiker had 414 stores, with about a quarter of them outside of Germany. The retailer employs 20,000 people, and more than 8,000 of them are outside of Germany. The company will file for protection from creditors for the Praktiker AG and some German parts of the group, Praktiker spokesman Harald Guenter said today, quoted by Bloomberg. The do-it-yourself retailer, which runs stores in 23 Romanian cities, recently failed to sell a stake in Luxembourg-based unit Batiself SA because the buyer’s board didn’t approve a deal, the retailer recently said in a statement. Proceeds from a sale had been “firmly included” in the retailer’s financing plan from last year, and Praktiker now faces excessive debt and a lack of liquidity. In 2012, when the international media rumored a sale of Praktiker's business across several markets, including Romania, the retailer said it had no plan to exit the local market: “We are optimistic and we have identified ways to make the Praktiker business efficient on the market were we operate, which is natural following the volatility of the segment in recent years. We do not have a plan to exit the local market. Within each company, shareholders always talk about proposals and strategies to optimize profit, but from intention to implementation, there's a very long road, as we're talking about a hundreds of millions of euros business,” said Michael Krahn, Country Manager Praktiker România in April 2012. Praktiker's sales in Romania were of EUR 142 million in 2012, down 1.5 percent on 2011 in local currency. Earlier this year, Krahn again highlighted the idea of further investing in Romania, which is a strategic market for Praktiker, and one of the largest markets in Eastern Europe. The do-it-yourself retailer posted sales of EUR 3 billion across all of its markets in 2012, a 5.6 percent decline on 2011, and a loss of EUR 128 million, which was a 65 percent improvement on the year before. editor@romania-insider.com