The last major German department store group has been struggling to survive for years. But even a debt cut in the billions and state aid could not give the group new impetus. Galeria Karstadt Kaufhof needs state support again.
Germany’s last large department store group, Galeria Karstadt Kaufhof, is again seeking rescue in protective shield proceedings. This was announced by a company spokesman in Essen. The procedure is aimed at restructuring, with a court-appointed administrator taking over the supervision of the rescue mission, but the company management retains control and is advised externally.
According to “Wirtschaftswoche”, the two insolvency experts Frank Kebekus and Arndt Geiwitz, who were already involved in the first protective shield procedure at Galeria Karstadt Kaufhof in 2020, are to be deployed. At that time, many branches were closed and several thousand employees lost their jobs. The first insolvency proceedings left the department store chain at the end of September 2020 after the creditors approved the restructuring plan.
The group later – plagued by the Corona crisis – received government aid worth millions. Most recently, the chain was then faced with high energy costs and consumers’ reluctance to spend.
Galeria boss Miguel Müllenbach told the “Frankfurter Allgemeine Zeitung” that the branch network had to be “reduced by at least a third” as part of the protective shield procedure. Layoffs are unavoidable. With 17,000 employees, the group currently operates 131 department stores in 97 German cities.
A debate has broken out about the fresh state aid for the ailing department store giant in view of the billionaire Galeria owner René Benko. The North Rhine-Westphalian Economics Minister Mona Neubaur spoke out in favor of Benko’s commitment. “Yes, I think it’s Mr. Benko’s turn to also contribute capital,” said Neubaur. At Galeria, future prospects must be discussed seriously. The department store giant should not become a bottomless pit. At the same time, she thinks it’s “not a good idea to say now that we’re going to let Galeria go bankrupt”. Retail plays a central role in inner cities.
Galeria Karstadt Kaufhof belongs to the Signa Holding of the Austrian real estate investor Benko. Among other things, it has a real estate portfolio worth billions. The department store giant emerged in 2019 from the merger of Karstadt and Kaufhof operated by Benko.
