The organic supermarket chain Basic has filed for insolvency. Apparently, falling demand and rising rents have left the company in an economic mess. In addition, high prices and inflation are causing problems for the organic sector in Mark. Basic’s management has now applied to the Munich District Court for a protective shield. The retailer’s 20 organic stores are to remain open during the proceedings.
Employee salaries of 20 stores are secured for three months
The Munich District Court has already followed the application in the insolvency law. Basic confirmed this to Bayrischer Rundfunk. The company is not insolvent, the report continues. The salaries of the approximately 520 employees of the 20 stores in Germany are secured for three months by the Federal Employment Agency, it said. According to the report, operations in the stores will continue as normal for the time being. The organic market chain is represented in this country mainly in Bavaria, but also in Hesse and Baden-Württemberg with stores.
Increased food prices
Basic justifies the step into insolvency with restrained consumer behavior due to increased prices for food. According to the chain, it can rely on the loyalty of most of its customers. However, 15 percent of consumers are switching customers who are holding back because of high inflation. Similarly – as with other food retailers – high energy costs also hit the organic chain’s balance sheets.
The company’s subsidiary Biomammut is also to be restructured under protective shield proceedings, Basic further announced. Biomammut had already filed for insolvency proceedings in self-administration at the end of November and probably weighed heavily on Basic’s business. Biomammut runs a total of six stores in Baden-Württemberg, according to Lebensmittel Zeitung (LZ). Basic was one of the pioneers among organic supermarkets.
Basic is one of the big five organic chains
The chain was founded in 1997, is one of the big five organic chains after Denn’s, Alnatura, Bio Company and ebl-naturkost, and most recently generated net sales of around 150 million euros. As recently as the end of November, the organic supermarket chain had opened a new store at its headquarters in Munich. That was once upon a time when the organic market was still a growth market. Times have changed. Energy costs and rents are giving organic stores a hard time.
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