Press Release of Adler Modemärkte AG

Result of the closure of almost all stores until at least the end of January 2021

Lockdown compels ADLER to apply for the opening of insolvency proceedings in self-administration
Business operations shall be continued and ADLER restructured by means of an insolvency plan

Haibach (near Aschaffenburg), 10 January 2021 - As a result of the renewed officially ordered closure of 169 of the total of 171 stores until at least the end of January 2021, the management board of Adler Modemärkte AG today resolved to file an application for the opening of insolvency proceedings in self-administration pursuant to Section 270a of the German Insolvency Code with the local court of Aschaffenburg.

Despite intensive efforts, the company was unable to close the liquidity gap caused by the Corona-related drop in sales through a capital injection from state support funds or investors. In the first half of 2020, ADLER had still managed to cushion the first COVID-19-related lockdown thanks to a then solid balance sheet structure and the securing of comprehensive financing commitments.

The aim is to financially restructure Adler Modemärkte AG by means of an insolvency plan. In the case of self-administration, the business operations are continued in their entirety under the supervision of a (preliminary) custodian (Sachwalter). The management board continues to have the power of administration and disposition. For support with the upcoming measures, the management board appointed the lawyer Dr. Christian Gerloff, Gerloff Liebler Rechtsanwälte, an expert for restructuring and insolvency cases with a proven track record in the textile retail sector, as general representative of the company.

"The renewed Corona-related closure of almost all stores has unfortunately left us with no other choice. We will do everything in our power to maintain the business operations and to restructure ADLER as quickly as possible and lead it into a positive future once again", said Adler Modemärkte AG's CEO, Thomas Freude.

Crisis situation despite high cash position and solid balance sheet at the beginning of the Corona crisis
The example of ADLER shows that in the textile retail sector, even a company that had still reported record net liquidity of EUR 70.1 million and solid balance sheet quality at the end of 2019 can find itself in an existential crisis through no fault of its own and within just under 12 months. After a drop in sales due to the first lockdown in the months of March to May 2020, ADLER had seen a noticeable recovery trend in the third quarter and well into October 2020. However, the renewed restrictions on public life since the end of October led to significant sales losses. This situation was massively exacerbated by the officially ordered closure of all stores in Austria in November and, since 16 December, also in Germany. Even the focus on maximum cost efficiency and liquidity generation initiated by the management board could not prevent the insolvency application.

Foreign subsidiaries not affected
Adler Mode GmbH, Adler Orange GmbH & Co. KG and Adler Orange Verwaltung GmbH, each wholly-owned subsidiaries of Adler Modemärkte AG, today also resolved to file an application for the opening of insolvency proceedings in self-administration at the local court of Aschaffenburg. The management of these companies will also be supported by Dr. Christian Gerloff as general representative. Other domestic and all foreign subsidiaries of Adler Modemärkte AG are currently not affected and continue their business operations without any changes.

The applications pursuant to Section 270a of the German Insolvency Code were filed in accordance with the stricter requirements for self-administration introduced by the German Act on the Further Development of the Restructuring and Insolvency Law (Sanierungs- und Insolvenzrechtsfortentwicklungsgesetz), which are in force since 1 January 2021.   Adler Modemärkte AG press enquiries and investor relations: Peter Dietz
Media und Investor Relations
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About Adler Modemärkte AG:
Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2019, the Group generated revenue of €495.4 million and EBITDA of €70.3 million. As at 30 September 2020, ADLER employed a workforce of around 3,350 and currently operates 171 stores, 142 of which are located in Germany, 24 in Austria, three in Luxembourg, two in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m2 of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to more than 70 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 55 and over.
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