Credit insurance provider warns German textile firms of challenges ahead
15/09/2016
Stagnating sales, low margins, and persistently strong competitive pressure make life increasingly difficult for many companies, despite the sector’s relatively stable levels of consumption. Payment terms can be very long and some players have little financial leeway for necessary structural change investments, the company said.
Ron van het Hof, chief executive of Euler Hermes for Germany, Austria and Switzerland, commented: “Due to low margins, earnings forecasts and liquidity cover are relatively low for some companies, and in some cases payment default risk is high. Since the year began, we’ve seen insolvencies among well-known names, as well as many smaller companies going bankrupt. Overall average credit ratings in the sector are falling. And we believe that more textile companies will experience problems in the future.”
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