Company bankruptcies increased at a record pace this summer in France, where “the return to pre-Covid standards is accelerating,” according to a study published this Monday by the specialized firm Altares.
In 12 consecutive months, “the bar of 38,000 insolvency proceedings has been exceeded for the first time since the summer of 2020,” according to Altares, who adds that it is an “increase of 10,000 rulings in one year, which, however, does not contributes France returns to the default levels of September 2019”, before the health crisis, with 53,500 defaults in one year.
SMEs, fast food and Hauts-de-France are the most affected
The increase was particularly high for SMEs with 20 to 49 employees, whose number of defaults more than doubled in one year this summer to 186 open procedures, approaching the summer 2019 level of 193 procedures.
By sectors, the increase exceeded 200% in fast food, reached 115% in online sales and 109% in clothing. The industry posted an 85% increase, to 688 defects, driven by food (297 defects, or +141%). The degradation is also very significant for hairdressers and beauty salons (+94%), while agriculture limits the increase in the number of failures to 11%.
By region, the accident rate of companies doubles in Hauts-de-France, which finds a situation equivalent to that of 2019, while “the PACA region seems to resist better”, according to Altares.
Direct judicial settlements are majority
During the Covid-19 crisis, fragile companies had been protected by government support measures, such as the relief or facilitation of the payment of social security contributions and state-guaranteed loans (PGE) that supported their cash flow. . Therefore, the loss rate seen in the third quarter of 2021 had been the lowest ever seen in 25 years.
Last summer, almost three quarters of the procedures opened with the commercial courts were direct judicial liquidations, a rate higher than the one before the health crisis (68%). Judicial reorganizations represented 24% of the total, while safeguard procedures are still few, although their number (229) exceeds the pre-crisis level.
Source: BFM TV
