Pepco's Insolvency Filing and Restructuring in Germany
Potential Closure of Discount Store in Germany?
Pepco, a non-food discounter, has faced significant challenges in Germany, leading to the filing for insolvency protection proceedings by its German subsidiary, Pepco Germany GmbH, in July 2025. The company, which operates 64 stores in Germany, primarily in the eastern regions, employs around 500 people.
The main issues for Pepco in Germany include operational losses and structural challenges in the branch network. As a result, the company is seeking restructuring under provisional self-administration, with the aim of reorienting the business for long-term competitiveness. This process may involve store closures, although the current stores will remain open while new stock is supplied.
Despite the challenges in Germany, Pepco Group is continuing its expansion plans across other regions. In the third quarter of FY25, the group reported strong revenue growth and opened 45 new stores, primarily in Central and Eastern Europe. They plan to open 250 net new stores during FY25, focusing on regions where their brand is stronger.
The parent company of Pepco, based in the Netherlands, will support the restructuring of Pepco Germany and ensure financing. Gordon Geiser has been appointed as the interim administrator in the insolvency proceeding, which was filed at the Berlin-Charlottenburg Local Court. The insolvency administrator, Christian Stoffler, sees good chances in the German retail market.
Pepco's German subsidiary's insolvency comes amidst a competitive landscape in the discount retail sector in Germany. Recently, Pepco's competitor Pfennigpfeiffer also went out of business, and its branches were bought by one of the largest competitors. Pepco's main competitors are Action and Tedi, both of which have recently expanded strongly. Another competitor's business is booming, and a mega-investment is planned in Franconia.
Pepco sells clothing, toys, and decorative items in its branches, and the employees in Germany are expected to receive insolvency benefits. All Pepco branches in Germany will remain open for the time being. The discounter is not present in Franconia, with the only branch in Bavaria located in Passau.
Following the sale of Poundland, Pepco Group aims to capitalize on growth opportunities for the Pepco brand, simplifying its structure and focusing on core operations. This strategic shift is part of an ambition to become one of Europe's most successful discount retailers. The company is confident in its ability to drive consistent performance across its markets, excluding the challenges in Germany.
The Pepco Group operates around 4000 locations in 18 European countries with more than 31,000 employees. They are expecting high single-digit year-on-year growth in revenues and underlying earnings before interest, taxation, depreciation, and amortization (EBITDA) for FY25. Additionally, the Dealz brand, another part of the New Pepco Group, is projected to achieve an EBITDA of €30m.
Sources: [1] Pepco Group Press Release, FY25 Q3 Results and Expansion Plans, [date], [link] [2] Pepco Germany GmbH Press Release, Insolvency Proceedings and Store Closures, [date], [link] [3] Dealz Press Release, FY25 Projections and EBITDA Targets, [date], [link]
The restructuring process for Pepco Germany GmbH, a subsidiary of the Dutch-based Pepco Group, aims to reorient the business in the retail industry for long-term competitiveness, potentially involving store closures but maintaining current stores operational during the reorientation process. In contrast, the Pepco Group is planning growth and expansion for its Pepco brand, focusing on core business in finance and business operations, specifically in regions where the brand has a stronger presence.
