Many small and medium-sized enterprises associate “insolvency” with shocking events. In practice, it is often different. The collapse is announced weeks, sometimes months in advance. The problem is rarely a “lack of diligence reporting”. The problem is a lack of knowledge about the real drivers. And a lack of consistency.
Gerry Weber: Repetitive loops instead of real course correction
This pattern is very clear at the fashion company Gerry Weber. According to reports, 122 of 171 stores in Germany were closed and jobs were cut in 2023 – yet the situation remained critical.
In 2025, the company slipped back into insolvency; the media are talking about recurring insolvencies/restructuring.
Important: this is not about “fashion being difficult”. It is about a lesson that many SMEs are familiar with:
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The cost structure does not match demand.
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Measures come too late or are too small.
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Symptoms (locations) are optimised, but not the causes (product range, purchasing, margin, channel strategy, cash flow).
Where “ignorance” arises in concrete terms
Ignorance is rarely “we don’t have any data”. It is more likely to be:
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Data is available, but not connected (sales ↔ margin ↔ stock ↔ cash).
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Figures are reported, but not recorded as leading indicators.
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The problem is recognised, but not the speed at which it is tipping over.
The 6 early warning figures that SMEs really need
These key figures are simple. The crucial thing is to review them weekly – and with clear thresholds.
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Gross profit by product group/customer
When gross profit declines, turnover does not help.
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Stock range vs. sales
When inventory rises and sales fall, cash eats you up.
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Price reductions / discount rate
Discounts are often the first silent indicator of incorrect positioning.
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Cash conversion cycle
How long is money tied up in the system? (Payment terms, stock, accounts receivable)
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Fixed cost ratio vs. realistic sales basis
Fixed costs must fit in with conservative planning, not with hope.
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13-week liquidity forecast
Not monthly. Weekly. With scenarios.
What AI can and cannot do here
AI cannot replace restructuring decisions. But it can help to identify the following more quickly:
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Which product groups “look good” but burn cash.
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Which measures have historically come too late in similar cases.
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Which signals in the market (prices, frequency, competitor actions) increase the pressure.
People then have to do what is difficult: Stop, focus, simplify.
What SMEs can learn from this
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Leading indicators are more important than perfect monthly financial statements.
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Cash is the operating system. Turnover is just an app.
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Measures need thresholds: “If X, then Y.”
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Restructuring is a speed problem – not just an ideas problem.
