The do-it-yourself boom during the COVID-19 pandemic brought unprecedented profits to home improvement retailers. However, that era has come to an end. The struggling hardware chain Hellweg is reportedly planning to close seven additional locations, a move that internal sources have described as a “liberating step.”
During the pandemic, home improvement and garden centers experienced a significant surge in demand. Consumers, spending more time at home, took on major renovation and DIY projects. But in recent months, customers have been postponing larger projects and holding back on spending due to rising costs and economic uncertainty. As a result, the industry has been unable to sustain its earlier high revenues.
Hellweg, which has already been grappling with financial challenges, is now taking action. According to a report by Handelsblatt, the company’s owner, Markus Semer, is planning to shut down at least seven more stores. The newspaper cites sources within the company, noting that the closures are seen internally as a necessary turning point. The decision to close the Hanau and Münster branches has already been finalized. In addition, a refinancing deal with banks is reportedly close to completion.
When asked for comment, Hellweg confirmed to Handelsblatt that it is adapting to changing market conditions and aiming to establish a sustainable structure. The goal, the company said, is to focus on locations that remain profitable.
Efforts to improve the company’s financial health have been underway since last year. As reported by Lebensmittel Zeitung, the Dortmund-based retailer launched a series of discount promotions in April 2024 to reduce inventory levels. At the same time, the company planned to cut more than ten percent of its store workforce. Hellweg also asked suppliers for price reductions and additional marketing support. “The retailer is open to negotiations and willing to consider proposals,” a manufacturer told the trade journal at the time.
While the DIY trend brought windfall profits to the industry during the pandemic, the economic environment has since shifted. High energy prices and persistent inflation have dampened consumer confidence. Retailers had hoped 2024 would mark a turnaround, with some expecting a boost from the UEFA European Championship hosted in Germany. However, those hopes have largely gone unfulfilled. For the second year in a row, the sector has reported a decline in revenue. Despite this, nominal sales in 2024 remained approximately 7.5% higher than pre-pandemic levels.
Hellweg’s latest downsizing move underscores the broader challenges facing the home improvement sector. As economic pressures persist, many retailers are being forced to rethink their strategies and scale down operations to remain viable in a more cautious consumer environment.
