Many small and medium-sized businesses associate the word ‘insolvency’ with sudden, shocking events. In reality, things are often different. The collapse is foreshadowed. Weeks, sometimes months, in advance. The problem is rarely a ‘lack of diligent reporting’. The problem is a lack of knowledge about the real drivers. And a lack of consistency.
Gerry Weber: Repeating the same mistakes instead of making a genuine course correction
This pattern is very clearly evident at the fashion company Gerry Weber. In 2023, according to reports 122 out of 171 branches in Germany were closed and jobs were cut – yet the situation remained critical.
In 2025, the company slipped back into insolvency proceedings; the media speak of recurring insolvencies/restructurings.
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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One optimises symptoms (locations), but not the causes (product range, purchasing, margins, channel strategy, cash flow management).
Where ‘lack of knowledge’ specifically arises
Lack of knowledge is rarely “we have no data”. It is more likely to be:
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Data is available, but not linked (sales ↔ margin ↔ stock ↔ cash).
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Figures are reported, but not treated as leading indicators.
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You recognise the problem, but not the speed at which it is escalating.
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
If gross profit takes a nosedive, turnover won’t help.
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Stock range vs. sales
If stock levels rise and sales fall, cash will eat you alive.
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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 base
Fixed costs must fit with conservative planning, not with hope.
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13-week liquidity forecast
Not monthly. Weekly. With scenarios.
What AI can do here – and what it cannot
AI does not replace a restructuring decision. But it can help to identify more quickly:
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Which product groups ‘look good’ but burn through cash.
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Which measures have historically come too late in similar cases.
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Which market signals (prices, frequency, competitor actions) are increasing the pressure.
People must then do what is difficult: Stop, focus, simplify.
What SMEs can take away from this
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Early indicators are more important than perfect monthly accounts.
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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 question of pace – not just a question of ideas.
