Ternua Group has launched a voluntary creditor competition driven by the global textile crisis

Ternua Grouppresented a voluntary creditor competition to Donostia-San Sebastián Commercial Court No. 2 on Friday, as the "critical" situation in the textile market at a global level has had an "insurmountable impact" on the group.

According to EiTB, "the critical moment that the textile sector is going through globally and that has shaken even the most important companies on the international scene, following the tremendous and unprecedented adjustment of the market, has also hit the company hard and pushed us into this situation." The group has closed the last year with a turnover of 29.2 million euros, a negative result and a debt of 16 million.

The Basque textile industry group, based in Arrasate , brings together the brands Ternua, Astore, Lorpen and Loreak Mendian. The company has a production plant in Etxalar and has 28 directly managed shops, both single-brand and corner type. It currently has 180 workers "fully engaged and aware of all the shortcomings". 

The group explains that "until the last minute, and before making the decision to comply with the Insolvency Act, the management of Ternua Group has been in contact with potential investors who might be interested in continuing activity and employment and acquiring a production unit." 

The competition not in vain shall entail the binding offer of one of the three production units, namely Loreak Mendian, which shall be decided by the judge of the Court referred to above within one month.

Upon the submission of the voluntary creditor competition, as provided for in the Insolvency Law, the company shall be governed by an insolvency administrator, who shall make decisions concerning the future of the production units, on the offers which may come from them, and on the workers of the group.

As a result of many factors

According to the note, "the company has been in a difficult situation since 2023." It closed that year with revenues exceeding EUR 34 million, but with a negative result and a gradual increase in debt.

They have clarified that efforts have been made to address the situation in various ways, such as refinancing debt, optimizing structure and spending, and boosting investment and growth; but all these efforts have also been insufficient to cope with the "significant and sustained decline in outdoor product consumption since the second half of 2022." 

The reasons cited include changes in the habits of the population following the coronavirus crisis and the pandemic, the crisis in the international supply chain and the consequent increase in costs, and the consequences of the war in Ukraine, among other reasons, because the increase in inflation and the increase in rates reduced the spending capacity of consumers.