Bankruptcy case Hein Gericke

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Bankruptcy case Hein Gericke
Hein Gericke

Bankruptcy case Hein Gericke

Bankruptcy case Hein Gericke

Bankruptcy case Hein Gericke

Bankruptcy case Hein Gericke

8th pictures

Bankruptcy case Hein Gericke
Foerst

1/8
2013, “New Hein Gericke” with an old team, the managing director trio since 2009: Ralph Baches, Christoph Hansen and Achim Wirths (from left).

Bankruptcy case Hein Gericke
Hein Gericke

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Official HG press photo of a shop with few goods and clothing range almost exclusively in black.

Bankruptcy case Hein Gericke
Bilski

3/8
Hein Gericke (76) when asked for a comment on the situation in the company that still bears his name: “They put it in front of the wall again – people with an accountant mentality, without ideas or visions.”

Bankruptcy case Hein Gericke
Schumann

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Horst and Heike Simon in front of the Gericke shop in Nuremberg, which they ran until 2010. Her successor could no longer pay for the electricity and closed the door.

Bankruptcy case Hein Gericke
Kreplin

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Insolvency administrator Georg Kreplin is aware of the problems: “The objective at the beginning of the season is again an absolutely efficient range that is being expanded”.

Bankruptcy case Hein Gericke
manufacturer

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Rainer Hullmann has worked in the German motorcycle industry for 35 years and has been an LS2 man since 2011.

Bankruptcy case Hein Gericke
Hein Gericke

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Bankruptcy case Hein Gericke
Bilski

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MOTORRAD editors Michael Schumann and Klaus Herder in conversation with Hein Gericke.

counselor

traffic & business

Bankruptcy case Hein Gericke

Bankruptcy case Hein Gericke
Downfall and salvation?

For the third time, the Hein Gericke chain is facing financial failure, and the trading partners are making the most serious allegations against the management. Silver lining: Chinese investors want to save the accessories specialist and thus secure access to the German market.

Michael Schumann

02/13/2014

When the news came in December 2013 that the Hein Gericke Deutschland GmbH had to file for bankruptcy again, a certain dismay could be felt in the motorcycle industry: Just before Christmas of all times – how do the employees feel? However, hardly anyone was surprised by the bankruptcy. The former market leader in motorcycle accessories was not only in severe financial turbulence since summer 2012, when Gericke had to go into “preliminary insolvency proceedings under self-administration”.

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Downfall and salvation?

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Anyone who wants to understand what happened there cannot avoid first looking at the structure of the retail chain and the dull economic background. Hein Gericke basically consists of eight companies, the Hein Gericke Group as a holding company and the subsidiaries, including Hein Gericke Deutschland GmbH, both based in Dusseldorf. Hein Gericke Deutschland GmbH acts as a wholly owned subsidiary of the group and is the central purchaser of goods for all other subsidiaries. In autumn the group operated 78 stores, 49 of them in Germany, 15 in Great Britain, seven in the Benelux countries, six in Austria and one in Italy. Around half of Gericke stores in Germany were run by independent sales representatives, so-called shop partners, who work on a contractually regulated commission basis (franchise system). The other half are employed by branch managers.

The bank immediately asked for the loaned money back

Hein Gericke’s financial staggering was in the summer of 2012 when the US bank Gordon Brothers, headquartered in Boston, prematurely terminated a line of credit and called it back immediately. Two years earlier, in May 2010, Gordon Brothers had spoken in a press release of a “close cooperation” and a “solid future” for Hein Gericke, but then apparently had to recognize that Gericke had not achieved contractually agreed goals.

The “solid future” consisted of up to 3.4 million euros at an “extreme interest rate” of “up to 20 percent per annum (!)”, Said insolvency administrator Georg Kreplin in retrospect. The sudden maturity of the sum led to the bankruptcy of the British Hein Gericke subsidiary Hein Gericke UK, which apparently guaranteed the loan, and then to the protective shield proceedings (insolvency under personal responsibility) of Dusseldorfer GmbH.

“We just didn’t have any goods”

After that, things should have picked up again in 2013. The creditors approved the restructuring plan and thus a haircut for the Dusseldorf company. An investor from Switzerland got on board and the company wanted to reinvent itself under the old management under the slogan “New Hein Gericke”. What happened then, however, bitterly many employees, especially Gericke’s independent sales representatives as shop partners: “2012 was really bad because we simply didn’t have any goods. And if you have nothing to sell, you don’t earn anything either. But 2013 was even more catastrophic, ”says a long-time former employee. Out of consideration for relatives who still have contracts with Hein Gericke Germany, he does not want to be named.

Horst Simon from Nuremberg, on the other hand, doesn’t have to mince his words. The retail salesman took over the Nuremberg Hein Gericke shop in 2003. “That was after the first bankruptcy, when US investor Fairchild was in charge in Dusseldorf. They had good ideas, ”says Simon. “You wanted to make Gericke a lifestyle brand. But they also had bad ideas, such as that you didn’t need a catalog. That didn’t work at all without a catalog because German motorcyclists simply want something to leaf through. Nevertheless, things went well for us in the first few years, ”reports the man from Nuremberg, who left Hein Gericke at the end of 2010 and has been working as a management consultant ever since. “We invested a lot of energy, I had 60 hour weeks, only Sundays were free, and my wife and daughter were also in the shop. When we had events, there were eight or even ten of us. It was worth it, we increased sales by around a quarter and were even Shop of the Year for Gericke in 2006. “

Consistently and completely bypassed the market

But then the problems began and a gradual decline began. Not just for Horst Simon and the Nuremberg shop. Other trading partners who turned to MOTORRAD after the bankruptcy in December 2013 also report almost word for word about the same problems, errors and omissions on the part of the Dusseldorf management. The two key messages, as Horst Simon and his wife Heike summarize: “Hein Gericke has consistently and completely avoided the market in recent years.” That means that Gericke did not offer what the customers wanted. And, more seriously: “We missed the goods.”

Reactions from Hein Gericke customers, some of which can still be read on Hein Gericke Germany’s Facebook page, also indicate that these allegations may not be entirely unfounded. On November 21, 2013, a “Klaus Haudegen Brause” commented on the advertisement for Hein Gericke shopping vouchers published on the same day with the question: “And what should you spend them on when you have nuances in your shops?”

Another shop operator from southern Germany, who does not want to be named for personal reasons, describes his way into debt as follows: “My family gave me a solid financial background. Otherwise I couldn’t have run the shop for more than a year. The main turnover must be made in the spring. You have to build up reserves for autumn and winter, where you then have to bring money with you to get through. But how often did I have to say to customers in spring 2012: ‘I’m sorry, I can’t sell you anything.’ It went so far that we even ran out of two-stroke oil. The stores sent each other individual bottles of oil – if a customer was willing to wait a day for them. But instead of waiting, most customers simply walked 300 meters further to Polo or Louis, because they had everything there. I even understood that. “

“Now everyone has their backs to the wall financially”

Horst Simon has another example: “If there were goods, we didn’t have the right sizes. For example, from the Gericke-Master-V-Kombi, one of the best Gericke products ever and premium quality à la Rukka, there were neither short nor long sizes for the trousers. The reason we heard from Dusseldorf was: too expensive to stock. But the average German motorcyclist is not necessarily 1.85 tall at 80 kilos. In other words, most of them simply didn’t fit in the sizes offered. ”All shop operators contacted by MOTORRAD report that it is contractually prohibited for shop partners to purchase goods from any source other than the Hein Gericke head office in Dusseldorf. “Then it made things even more difficult that we had to send goods to the top stores in Frankfurt, Flensburg or Singen every day on instructions from Dusseldorf. That may have made sense from a business perspective, but it deprived us of our livelihood.

In mid-2013, the instruction came to all stores to send chain sets, i.e. chains, pinions, sprockets and even chain locks, back to Dusseldorf. From that point on, they were only available to order in stores. Now make that clear to a customer who is standing in front of you on Saturday with oil-smeared hands and needs a new chain. He wants her right away and not just on Monday afternoon. In Dusseldorf, a maximum of 15 percent motorcyclists who understand such connections, says one of the alumni with resignation. “Now everyone has their backs to the wall financially.”

In 2014 there will be no catalog for Hein Gericke

Horst Simon’s successor in the Nuremberg store gave up in November 2013 and closed the shop. In a message dated January 28, 2014, Hein Gericke is looking for a store manager for Nuremberg and five other locations on his website. In Neu-Ulm, the shop operator filed for bankruptcy almost at the same time as the Dusseldorfer GmbH. Individual shop partners may not be entirely to blame for this misery. The fact that there is far too little is a fact. In a 2013 company portrait, the Hein Gericke Group put the number of “active items in the product range” at “approx. 5000 “. For comparison: When asked by MOTORRAD, Detlev Louis mentions “22,000 items in the catalog, 30,000 with online trade”.

Hein Gericke will not have a catalog for 2014. A spokesman for MOTORRAD: “There was already no money for catalog production in the summer.” Insolvency administrator Georg Kreplin has also recognized this problem: “We are working at full speed on the supply of new goods. The range in the branches will improve every week. The range is being expanded. “

On February 1, 2014, with the opening of insolvency proceedings, Chinese investors around the owner of the helmet manufacturer LS2 took over the helm in Dusseldorf (see interview).

The enterprise

Timeline

  • January 1970: At the elephant meeting, 32-year-old Hein Gericke decides to trade in motorcycles in the future.
  • 1972 Gericke has contracts with all manufacturers, subsequently selling 5,000 machines a year.
  • 1974 Gericke decides to include motorcycle clothing in its range and begins to design it himself.
  • 1976 Hein Gericke is the largest motorcycle dealer in the world.
  • 1980 There are already 14 HG shops in Germany, Gericke has started the mail order business and is publishing a catalog for the first time.
  • 1987 the entrepreneur Hein Gericke sells the trade. The chain, now comprising 40 stores, will continue to bear his name.
  • 1994 Eurobike Aktiengesellschaft emerges from Hein Gericke GmbH. More and more brands are gathering under the umbrella of the AG, among others. DiFi, GoTo helmet studio, shoes and polo are part of it.
  • 2000 Eurobike operates 150 stores across Central Europe.
  • 2003 Eurobike files for bankruptcy (Polo is not affected as it is profitable and is not liable for debts). The US company Fairchild joins as an investor and takes over, among other things. the Hein Gericke chain.
  • 2009 if Fairchild gets out again, it has to file for bankruptcy in the USA itself. The Hein Gericke Group will be continued by three managing directors following a management buy-out. Polo has long since gone its own way.
  • 2011 The Hein Gericke Group tries to improve its financial situation by issuing a bond.
  • 2012 Due to massive losses, Hein Gericke UK (Great Britain) has to file for bankruptcy in July. As a result, Hein Gericke Germany applies for protective shield proceedings, supervised by attorney Georg Kreplin. At the end of 2012, the General Equity Group from Switzerland joins Gericke as an investor.
  • 2013 In June becomes a former peek&Cloppenburg manager, chairman of the management of Gericke, will only stay that way until November. In September, the former BMW Motorrad boss Marco von Maltzahn becomes Chairman of the Advisory Board of the Gericke Group. At the end of October, Gericke tries to issue another bond, but fails with the placement, allegedly for reasons of deadline. On December 16, Hein Gericke GmbH had to file for preliminary bankruptcy. On December 30th, the provisional insolvency administrator Georg Kreplin announced that “a purchase agreement was concluded with an investor based in Spain”.

Interview Rainer Hullmann


Bankruptcy case Hein Gericke


manufacturer

Rainer Hullmann has worked in the German motorcycle industry for 35 years and has been an LS2 man since 2011.

One of the Chinese investors who have now taken on the form of Hein Gericke Europe GmbH and who want to secure the company’s continued existence in the long term is the owner of LS2, a company that is an internationally operating helmet manufacturer from the motorcycle industry, but still few in Germany is known.

What is it about the statement that LS2 has taken over the Hein Gericke company?
It is true that a group of Chinese investors approached Paul Liao, head of the Spanish company Tech Design Team, and asked for his help. He should examine the extent to which the takeover of Hein Gericke is desirable. Tech Design Team (TDT) is based in Barcelona and has been managing global sales and the development of the LS2 brand from Spain since 2007. Although the brand has only been around for six and a half years, it is already one of the big names in the world and in 2013 sold over 1,100,000 helmets. Hein Gericke took over this group on February 1st and now intends to reposition the company.

In our last issue, Gericke insolvency administrator Georg Kreplin described this as a “win-win situation”. Do you see it that way and why??
Of course. As a result, LS2 is perfectly positioned in terms of sales.

The Hein Gericke stores will then become LS2 stores?
No, not at all. One must not assume that LS2 products will take up the majority of the space in Hein Gericke shops in the future. That wouldn’t work at all. LS2 will occupy a place in Hein Gericke’s portfolio, but will only be one piece of the mosaic in the range and will certainly not dominate in terms of presence. Overall, this will make the LS2 brand better known and stronger. Our marketing and that of Gericke will push the product.

Nevertheless, one can say that LS2 is essentially buying itself a dealer network?
I’ve heard this sloppy phrase a lot lately. Of course, it is not entirely correct. As already mentioned, the owner of LS2 is just one of several Chinese investors who are now joining Gericke. And as far as LS2 is concerned, one must not forget that the sales channel via the Gericke shops will only represent a small branch in the entire LS2 sales structure. Independent specialist dealers will also continue to sell LS2. But: In the big cities where the shop chains have established themselves, there are almost no more independent specialist dealers who successfully and on a large scale sell helmets and clothing. And the few that are left have come to terms with the competitive situation and adjusted to it. They sell almost the same brands as the shop chains, but have acquired a customer base with different services and their own profile. LS2 is currently almost exclusively represented outside of the big cities. In the future, we will be able to fill these blank spots with Hein Gericke, without any major points of contact with LS2 specialist dealers. Where Hein Gericke and traditional retail meet, those who better serve the customer will be successful. It has always been like that. We at LS2 have the ambitious goal of becoming the market leader one day. Unfortunately, we cannot do this exclusively through traditional specialist retailers. This wheel can no longer be turned back. In this respect, we have the same right as all of our well-known competitors to sell our products via shop chains. At this moment and possibly later with Hein Gericke as a sales channel, we are certainly not over-represented on the market. Our presence will improve.

Okay, so LS2 should become the market leader in helmets. But in which direction will Hein Gericke develop in the future? What will the strategy look like??
I cannot answer that because it does not fall within my area of ​​responsibility and I am not involved in these discussions. But one thing is clear to me: Gericke has lost a lot of sales in recent years. That was certainly due to the shrinking market as well as the strong competition. Where did the customers go who couldn’t find what they were looking for at Gericke? But usually to Louis and Polo and not to independent specialist dealers, as it is a shame. For me it is obvious that Gericke has to win back customers and sales from there too.

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