Legacy DDR Company Faces Insolvency, Over 240 Jobs at Risk

The renowned photographic laboratory, Orwo, known for its historical significance in East Germany, has filed for insolvency, putting more than 240 jobs in jeopardy. The company, which once employed 14,500 individuals at its Wolfen facility shortly before the reunification of Germany, has faced a tumultuous journey since the fall of the Berlin Wall.

Founded as Original Wolfen, Orwo was a prominent brand for film production during the DDR era. Despite its initial struggles post-reunification, the company managed to survive a previous insolvency in 2002 when it was acquired by an Eastern German investor group. Following this acquisition, Orwo Net GmbH was established as a digital photo service provider in November of the same year.

However, recent developments have led to a new wave of challenges for the company. On March 25, the Dessau-Roßlau District Court appointed Christian Heintze from the BBL Brockdorff law firm as the provisional insolvency administrator. Heintze stated that the firm is currently assessing the situation to ensure continuity of operations.

According to reports from BBL Brockdorff, the insolvency was prompted by accumulated losses due to a challenging market environment and declining revenues. Previous attempts at an out-of-court restructuring have not yielded the desired results. Despite these struggles, the company continues to fulfill existing contracts and accepts new orders, with the claims of its 244 employees secured by insolvency payments for three months.

Orwo recently reported an annual turnover of approximately EUR30 million. However, the company has been facing ongoing difficulties, particularly in its business-to-business (B2B) segment, where sales have decreased as clients have established their production capacities. The competitive market is characterized by aggressive pricing strategies, discounts, and overcapacity, leading to a revenue decline of 6.2% in 2023, alongside a loss of EUR1.5 million.

As Orwo navigates through this challenging period, the implications of its insolvency extend beyond the company itself, raising concerns about potential impacts on partner businesses, including the major drugstore chain Rossmann, which relies on Orwo's photo services.