German discounter Mäc Geiz files for insolvency

German discounter Mäc Geiz has filed for insolvency, putting hundreds of jobs at risk.

The official German insolvency website showed on Tuesday that the company has filed for insolvency at a court in Halle, in the eastern state of Saxony-Anhalt. 

Business operations will continue for now across the company’s 180 branches, but the discounter warned that a fundamental restructuring is needed due to the difficult economic environment, including the closure of some branches.

Mäc Geiz sells everyday essentials such as household goods, drugstore items and stationery. The chain competes with retailers such as Action, Tedi and Woolworth.

The company states that it has just under 1,200 employees, mainly in eastern Germany. 

It is unclear which locations will be affected by closures, with all sites due to be reviewed in terms of their economic situation and profitability. 

Employees are to receive insolvency pay for three months. 

The discounter cited ongoing consumer reluctance to spend, rising living costs and economic uncertainties as reasons for filing for insolvency. 

Mäc Geiz had only recently changed hands, with Kodi Beteiligungs GmbH, which also owns the Kodi discounter, taking over the chain.

The retailer Kodi, which describes itself as a household discounter, is headquartered in Oberhausen. The company operates 150 branches in western German states, most of them in North Rhine-Westphalia.