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Thousands of German stores on brink of closure

Daily Sun | October 3, 2022

Over 15,000 German stores are facing bankruptcy due to soaring energy costs, Der Spiegel reported on Friday, citing the German Retail Association (HDE).

According to the report, the HDE wrote a letter to Vice-Chancellor and Economy Minister Robert Habeck in which it warned that the “exploding energy costs” are making it impossible for increasing numbers of retailers to make ends meet. The group called the situation “existentially threatening” and said that around 16,000 businesses may go bankrupt this year, while the “negative trend” is likely to continue through 2023, reports RT.

According to HDE President Josef Sanktjohanser and Managing Director Stefan Genth, the returns generated in many retail sectors are already extremely low today. In the case of clothing, the operating profit as a percentage of sales is 2.1%, while in the case of shoes it is currently negative at -1.2%. Even in the food segment, it is only 2-4%.

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