The ailing furniture manufacturer Hülsta-Werke is closing one of its two plants, thereby merging production at its home location in Stadtlohn in Münsterland.

In addition, what is probably the best-known traditional German manufacturer is once again cutting jobs.

The business situation at the company had been tense for a long time, and the situation became even worse in view of the increased prices for energy and raw materials combined with customers' reluctance to buy due to inflation.

Jonas Jansen

Business correspondent in Düsseldorf.

  • Follow I follow

At the end of last year, the company had to file for insolvency under self-administration, and the employees concerned were informed shortly before Christmas.

As the company has now announced, around 90 percent of the 196 employees who, in coordination with the works council, are to switch to a transfer company have already agreed to this.

24 employees change employer or retire, 33 employees are affected by the termination.

"In a challenging environment, we have to make our organizations lean, flexible and efficient," says Hülsta Managing Director Thomas Knecht in a statement exclusively available to the FAZ.

Since insolvency proceedings were opened on December 28th for two companies of the superordinate Hüls group of companies,

a lot has already been done, which is why the furniture brand is looking positively to the future.

"The refurbishment will be completed consistently and promptly and will make Hülsta fit for the future," says Knecht.

The process is expected to be completed in the second quarter of 2023.

The costs have to go down

The main aim is to reduce costs, which is why the plant in Ahaus-Ottenstein will be closed.

In Stadtlohn, the furniture is to be manufactured in one-shift operation in the future, which will also increase productivity and flexibility in production.

Knecht has experience in restructuring, which he once did as CEO of the Osnabrück logistics company Hellmann.

Even when he came to Hülsta as Managing Director in 2019 and at the same time became the largest individual shareholder in the Hülsta Group, the challenges were great.

The restructuring of the company had been going on since 2014. In addition to home-made difficulties in pricing, there were also the challenges of online trading and large furniture retail chains with strong private labels.

The workforce had already shrunk sharply in previous years,

The latest available figures show a turnover of 106 million euros in the Federal Gazette for the year 2020, which was a decrease of 9 percent compared to the same period last year.

"The original plan envisaged making the result of the Hülsta Group positive for the first time in years," it said, which, however, failed due to the restrictions of the corona pandemic.

While the industry as a whole benefited from the fact that more money was put into living, which otherwise flowed into consumption and travel, this did not go down equally with all manufacturers.

Furniture manufacturers in particular have a hard time

At the moment, however, almost the entire German furniture industry is groaning.

The situation is "still very challenging", as Jan Kurth, Managing Director of the Association of the German Furniture Industry (VDM), reports on request.

Although sales in the German furniture industry increased by almost 9 percent to 15.6 billion euros from January to October 2022, this is mainly due to price effects and primarily reflects the increased cost of materials.

Manufacturers feel this in particular.

"The cost increases can only be passed on to retailers in part and only with a time lag," says Kurth.

The German furniture manufacturers in particular are faced with the strong purchasing power of the furniture trade.

"Due to takeovers, the concentration in retail is progressing," says Kurth,

XXXLutz recently joined the online retailer Home24 and the furniture store chain Braun.

At least the very gloomy business climate brightened again in December, which is also due to the fact that delivery times and the availability of primary materials have eased somewhat again.

Knecht is also optimistic, which not only has to do with the fact that business continues as usual from the customer's point of view.

Due to the bankruptcy under self-administration, the management remains in office, which is currently how it works with the ailing department store group Galeria.

Hülsta has been assigned to Christoph Morgen as a trustee, the insolvency administrator from the law firm Brinkmann & Partner had recently accompanied the insolvency of MV Werften.

The type of restructuring allows for "great process reliability," says Knecht.

"It leaves the authority to act in our company so that we can now take all measures to make Hülsta fit for the future in the long term."