Photobook maker Orwo Net is in financial trouble, seeking new investors

GaryPageau
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According to Mitteldeutsche Zeitung (MZ),  a regional daily newspaper based in Halle, Germany, German photo brand Orwo Net is in financial trouble, despite the recent growth of the ORWO film brand. The 270-person company Orwo Net has filed for insolvency with the Dessau-Roßlau District Court, according to the report. Christian Heintze of the law firm BBL Brockdorff has been appointed as provisional insolvency administrator. “Currently, business operations are continuing as normal. All orders are being produced and delivered,” said Heintze. “The insolvency benefits will secure employees’ wages for the next three months.” He added, “an investor process will be initiated shortly.”

The MZ report states that declining demand for photo books coupled with fallout from the Coronavirus pandemic is putting the company in jeopardy:

Regarding the reasons for the insolvency, former managing director and co-owner Gerhard Köhler commented: “In recent years, we have noticed a reluctance among customers.” Spending on photo books has decreased. At the same time, energy and wage costs have risen significantly.

According to him, the shareholders have been investing money in the company for two years. “We’ve always had good discussions with the works council and banks,” Köhler said. Some restructuring steps have already been initiated. But ultimately, that wasn’t enough.

114-year-old Orwo has a long history in the region, founded in Wolfen, in 1909 as an offshoot of the AGFA film company. In 1936, the Wolfen factory began producing color film. In 1964, the brand name Original Wolfen (ORWO) was introduced. After the fall of the Berlin Wall, the company struggled and Pixelnet, a company specializing in digital photography, secured the rights.

Köhler also noted that the high costs of customer acquisition is prohibitive to company health, spending up to 35 percent of revenue on marketing to gain visibility on search engines