Praktiker withdraws from Turkey

11 February 2013. Praktiker AG is withdrawing from business in Turkey and, in view of the persistently loss-making operations in this country, suspends payments to the local subsidiary.

As a consequence of this decision by the Management Board, Praktiker Yapi Marketleri A. S., operator of a total of nine DIY stores across the country, filed for an application for managed insolvency proceedings – so-called ”insolvency delay proceedings” – with the pertinent Court in Istanbul today.

“With a view to our employees, suppliers and lessors, this decision was not an easy one, but it is inevitable in the present phase of our company’s strategic realignment”, explained the CEO of Praktiker AG, Armin Burger. “We want to return our domestic and international business operations to their former earnings strength. In this process, we cannot afford a persistent loss-maker like Turkey. We made intensive efforts to sell our Turkish subsidiary but could not reach an agreement that was economically acceptable for us. That is why we now have to take this route to end this loss-making commitment in the interest of securing the continued existence of the Group as a whole”.

In the framework of the insolvency delay proceedings, the store portfolio is to be divested wholly or in part to a third party according to a restructuring plan presented to the Court, and the inventories are to be sold off. If the Court approves this application, the management of Praktiker’s Turkish subsidiary will implement the plan under state supervision. In the course of the winding down of business, Praktiker in Turkey will try to find the best possible individual solutions for suppliers and lessors and seek to avoid job losses for the employees wherever possible, or handle them in a socially acceptable way.

Burger added: “Turkey is a very special case in our international portfolio. In all other countries we will be able to sufficiently improve profitability by adjusting structures and processes and by curbing costs further”.