Germany is seeing a sharp rise in insolvencies among companies with a minimum annual turnover of 50 million euros (54.5 million U.S. dollars), according to a study published on Monday by credit insurer Allianz Trade.
In the first nine months of this year, the number of larger businesses that went bankrupt increased by 73 percent year-on-year to 45, according to Allianz Trade. The fashion industry, hospitals, and mechanical engineering were hit particularly hard.
"Major insolvencies have returned this year and are on course to reach their 2020 peak," said Maxime Lemerle, head of insolvency research at Allianz Trade.
Among the German clothing companies filing for insolvency this year are well-known brands such as Peek & Cloppenburg and Gerry Weber. Aachener, a company that wanted to take over several branches of the department store chain Galeria Kaufhof, also went bankrupt.
Aachener is also in the news due to a scandal over company founder Friedrich-Wilhelm Goebel, who has been the subject of an arrest warrant since he refused to appear at a court hearing for asset fraud earlier this month.
With consumer prices still rising well above normal levels, Germany's entire retail sector has been under pressure this year. Driven by food prices, inflation has soared, only slowing to 3.8 percent in October.
As a result of high food prices, consumers are economizing on all other expenses, said Milo Bogaerts, CEO of Allianz Trade in Germany, Austria, and Switzerland. "This year, significantly fewer presents are likely to end up under the Christmas tree."
Since the German economy is depressed by subdued consumption and weak industrial output this year, the government is expecting a recession in 2023, with a contraction of 0.4 percent. (1 euro = 1.09 U.S. dollar)