It's a shame, says Frank Schmitt.

That was the first thing that came to mind when the Frankfurt bankruptcy court called him two weeks ago.

The court informed the lawyer that, as the provisional insolvency administrator, he had to look after the Höchst Porcelain Manufactory – just as he did four years ago.

Schmitt thought that was a pity, because at the time he had actually hoped to have found permanent salvation for the small but historically important company from Frankfurt-Höchst with a new investor.

The manufactory, founded in 1746, can claim to be the second oldest porcelain manufactory still in existence in Germany.

"We are doing everything we can to keep business running," says the provisional insolvency administrator.

Shrinking market

Falk Heunemann

Business editor in the Rhein-Main-Zeitung.

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This time he also has considerably less time for a rescue attempt than last time: the ten employees have not received any wages since mid-March.

With the insolvency application, the employment agency can pay insolvency money as wage replacement, also retrospectively.

But this is only possible for a maximum of three months, i.e. for April, May and now June - the employees would have already waived outstanding March payments.

The suspicion that insolvency has been delayed since March is plausible, but the owner and managing director is based in Asia and it will be difficult to hold him liable.

And it doesn't help much at the moment: If no new financier or investor is found for July, the company is threatened with closure.

The market for hand-made porcelain goods is not exactly large: Complete sets are rarely given away to a married couple, and filigree baroque figurines are no longer regarded by many as a necessary sign of bourgeois prosperity.

However, insolvency administrator Schmitt believes that business can continue to be made with it in the future.

The porcelain manufactory produces “great products”, they just need to develop a more coherent sales and marketing concept.

The Corona crisis, he emphasizes, was not the reason why the company was making losses.

Deadline end of June

Schmitt rarely has anything to do with porcelain.

As an insolvency administrator, he looked after the creditors in the Phoenix Kapitaldienst investment fraud case, wound up the Hanau clothing factory J. Philipp and averted the demise of the Frankfurter Rundschau.

But he knows Höchster Manufaktur and its employees well.

At the beginning of 2018, he had the first court order to find a solution for the then insolvent porcelain manufactory.

The entry of the investor Yung Wen Evan Chung, a Taiwanese who also manages the bathroom fittings dealer Zeva, then based in Griesheim near Darmstadt, seemed the most promising.

Chung relied on the Asians as a lucrative target group.

He had a web shop programmed, posted pictures of the manufactory in Chinese on Facebook and opened his own shop in the new old town.

A porcelain ox with gold-colored horns and hooves is symbolic of Chung's concept.

The image of the bull in front of the Frankfurt Stock Exchange stood for the year of the ox in the Chinese calendar, which began on February 12, 2021.

With a minimum price of 2000 euros, however, there was no boom in sales.

The insolvency money is sufficient for wages until the end of June, after which the company must either earn money itself again or be supported by an investor, at least temporarily.

Porcelain manufactories don't pay off

However, it is questionable that a new business concept can be formulated and implemented in just two weeks, with which income can be increased quickly.

Not only the wages for ten employees have to be financed, but also the raw materials and rents - the Altstadtladen is rented in a private house, the production is on a property of the municipal KEG.

And investments are needed.

Schmitt has therefore also turned to the state government.

Information is being collected and the case is being investigated, according to the government spokesman.

The state had already stepped in once before when the porcelain manufacturer got into difficulties: at the beginning of 2001, the Hessische Investitionsbank acquired a quarter of the shares when the owners at the time – the former Hoechst AG and Dresdner Bank – wanted to sell them.

An economically strong state like Hesse must be able to afford such a cultural asset, the black and yellow state government said at the time.

Other porcelain manufactories are now also state-owned because they obviously don't pay off privately.

The State Porcelain Manufactory Meissen, which was founded in 1710, has belonged to the Free State of Saxony since reunification.

The loss-making porcelain factory Fürstenberg, founded in 1747, became the property of the state of Lower Saxony in 2019.

"We believe that we should preserve such culturally and historically valuable institutions," said Prime Minister Stephan Weil (SPD).

The Bavarian manufacturer Nymphenburg was long owned by the Free State of Bavaria and was acquired in 2011 by Prince Luitpold of Bavaria, who recently had to close the shop in the center of Munich.

Insolvency administrator Schmitt is confident despite the short time.

The employees are “highly specialized and highly motivated,” he says.

The shop in Frankfurt's old town will remain open, and production and factory sales in Höchst will continue.

He invites everyone in Frankfurt to visit the locations.

That also helped the manufactory in 2018.