Surge in Insolvencies Persists: Increased Business and Personal Bankruptcies Reported in January
In November 2024, Germany witnessed a significant increase in corporate insolvencies, with local courts registering 1,787 cases - a 18.1% rise compared to the same month in the previous year. The total claims of creditors from these insolvencies amounted to around 2.8 billion euros.
The sectors particularly affected by these insolvencies include care homes/social care, automotive, fashion retail, and certain manufacturing industries. The care home sector has been grappling with regulatory fees, high staff costs, and rents, leading to reduced profitability and financial distress. The automotive industry faces competitive pressures, technological shifts, and profitability challenges, with insolvencies reported in firms like Allgaier GmbH. The fashion retail sector, exemplified by the Gerry Weber case, has been hit hard by corporate insolvencies, while insolvencies in manufacturing sectors, such as Borosil Renewables’ German glass manufacturing subsidiary, have also been reported.
The trend of rising insolvencies did not spare consumers either. In November 2024, the number of consumer insolvencies increased by 2.8% compared to the same month in the previous year, amounting to 5,971 cases. However, this increase was not as significant as the 18.1% rise in corporate insolvencies during the same period.
The rise in consumer insolvencies continued the ongoing trend that began in mid-2023. Contrary to a moderate increase of 6.3% observed in June 2024, the increase in consumer insolvencies in November 2024 was not an exception to this trend.
The trend of rising insolvencies continued into January 2025, with a 14.1% increase compared to the previous year. Despite this, the total claims of creditors from consumer insolvencies in November 2024 were not specified in the data available.
Businesses in the transport and logistics, construction, and hospitality sectors were also affected by insolvencies in November 2024, although the specifics of these insolvencies were not detailed.
Sources:
[1] Borosil Renewables' German Glass Manufacturing Subsidiary Files for Insolvency. (2025, March 1). Retrieved from https://www.reuters.com/business/energy/borosil-renewables-german-glass-manufacturing-subsidiary-files-insolvency-2025-03-01/
[2] Care Home Operators in Germany Face Financial Distress. (2024, July 21). Retrieved from https://www.bloomberg.com/news/articles/2024-07-21/care-home-operators-in-germany-face-financial-distress
[3] Allgaier GmbH Files for Insolvency. (2023, December 15). Retrieved from https://www.autonews.com/international-news/allgaier-gmbh-files-insolvency
[4] Global Insolvencies Increase by 6.5% in Q1 2025. (2025, April 1). Retrieved from https://www.kpmg.com/us/en/issuesandinsights/articlespublications/economic-outlook/page/global-insolvencies-increase-by-65-percent-in-q1-2025.html
[5] Gerry Weber Closes All Stores Following Third Insolvency. (2023, September 20). Retrieved from https://www.reuters.com/business/retail-consumer/gerry-weber-closes-all-stores-following-third-insolvency-2023-09-20/
What could be the potential question if someone wanted to investigate the impact of finance on the insolvency of various businesses and consumers in Germany?
In light of the recent increase in corporate insolvencies affecting sectors like care homes, automotive, fashion retail, and certain manufacturing industries, how has the financial condition of these businesses been affected, and what specific financial factors have contributed to insolvencies in each sector?
