EXCLUSIVE: New Look Slimmed Down Loewe Tipped, After Administrators Called In
German TV Company Loewe which is 96 years old has called in the administrators, but insiders are tipping that a new look Company could emerge as investors snap up assets and investors take advantage of the strength of the Loewe name and history.
In Australia the brand is distributed by Indi Imports.
According to people that ChannelNews has spoken to Loewe was haemorrhaging cash, not because of poor sales but because of a bloated work force that the Company inherited when the business was acquired by investors in 2014.
In Australia Loewe has doubled sales during the past 12 months via their relationship with Indi Imports sales are also booming across Europe and Russia and in the UK.
ChannelNews has been told by insiders in Europe that the Company who was battling German Unions had over 400 staff, when in reality the business could be run with between 100 and 150 people, but because of German employment contracts and the Unions the Company was dealing with these people could not be sacked without hundreds of millions in Euro payouts, which the Company did not have or their investors were prepared to stump up.
Last night the Company announced that the business will cease business operations on 1st July due to insufficient funds due in part to a decision by key investor Riverrock to not fund the current business any further.
“This does not mean that Loewe does not have a future. If they can remerge with a slimmed down workforce, new funding and a new TV manufacturing plant the brand has a big future” said
“For reasons of insolvency law, we are therefore obligated to protect our creditors to provisionally suspend operations on 1 July 2019 with the least possible cost burden,” said Loewe managing director Ralf Vogt.
“The brand was pledged to the holding company Riverrock, which had given loans to the Loewe owner,” said the solicitor overseeing the insolvency proceedings, Rüdiger Weiß.
But the 96-year-old company was denied a further nine-million-euro investment by Riverrock who ChannelNews has been told has been in talks with Foxconn the owners of Sharp who late last year signed an agreement with Loewe to be a supplier of components for Loewe”.
Weiß said employees, of which there are approximately 400, had been informed on the operational shutdown.
At this stage it’s not known whether a new Company trading as Loewe will employ new staff or some of the 400 staff who have been laid off after the administrators were called in.
Loewe has been plagued by financial restraints for several years and was saved from the brink of bankruptcy by Munich-based private equity firm Stargate Capital.
A statement issued to media said “Earlier this week on the 25th June Loewe announced to the Germany press that the insolvency process has been escalated, with the management deciding to move from self-administration to standard insolvency proceedings. Whilst Loewe had the support of its suppliers, distribution partners and customers it was unable to secure a loan required by its main creditors. As a result of the insolvency proceedings, Loewe will suspend business operations in Kronach provisionally from 1st July.
“Negotiations with potential investors continue apace with renewed impetus due to the reduction in liabilities a new investor would now incur. Plans are being put in place so that Loewe can continue to supply the majority of products to dealers in order to bridge any gap between the current and potential future businesses. It remains business as usual for the UK/IRE daily operations which are managed by Loewe UK Ltd.”
ChannelNews understands that Loewe had a new range of TV’s featuring new technology as well as an audio range ready to launch before they called in the administrators. There is also speculation that the brand could move their operations from Germany to the Czech Republic.