The Vorarlberg wheel manufacturer Simplon recently faced serious economic challenges; the company has now filed for bankruptcy. Accordingly, the company’s debts amount to 44.5 million euros – around 155 employees are affected.
The future of the Vorarlberg bicycle company Simplon is currently very challenging. Despite the strict restructuring of last year, the company is now in danger of going bankrupt. According to the company’s own information on Tuesday, the debts amount to around 44.5 million euros. The book value of the assets was estimated at 33.2 million euros, with liquidation values at around 7.3 million euros.
A restructuring procedure with self-government has been requested, so a payment rate of 30 percent is targeted for creditors within two years, a press release said.
Strong price pressure compared to competitors
The company, founded in 1961 as a family business in Hard on Lake Constance, was confronted with fierce competition and strong price pressure in the bicycle industry. Renovation measures were already initiated last year.
However, the entire industry has seen a decline in bicycle sales of around 30 percent since spring. Jakob Lusch, CEO of Simplon, attributes this to the very late start of the season due to the weather and “stocks at dealers and manufacturers are still very full.”
Ongoing activities must be secured
Managing director Lusch also explained that the company has been “in intensive discussions with potential investors for some time now to continue its restructuring course”. He highlighted the strong reputation and great potential of the Simplon brand in the industry, which had a positive impact on the negotiations.
The restructuring process that has been initiated not only secures the ongoing activities and solvency, but also makes it possible to intensify discussions between investors. Lusch also announced that the majority of the debts, namely 36.1 million out of a total of 44.5 million euros, were for banks.
155 employees affected
Both the current 155 employees and customers, suppliers and partners were informed about the restructuring process. The owners of Simplon Holding GmbH, of which Simplon Fahrrad GmbH is a 100 percent subsidiary, also stand united behind the plans and an upcoming solution through the entry of investors. In addition to the home market of Austria, the bicycles produced by Simplon are mainly shipped to Germany, Switzerland and the Benelux countries – the export percentage is around 82 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
