Galeria Karstadt Kaufhof is bankrupt. While creditors and the state are being asked to pay, it is unclear how the company owner will share in the losses. Trigema boss Grupp counters this with his own example as a liable businessman – and demands a financial reward for his peers.
Wolfgang Grupp, owner of the textile manufacturer Trigema, settles accounts with Galeria Kaufhof owner René Benko. The Austrian Benko owns the Signa Group, which owns the traditional department store group, which is now going through its second insolvency procedure in two years. A large part of the branches will probably be closed in the course of this insolvency, and a large part of the employees will have to reckon with losing their jobs.
In an interview with the “Handelsblatt” Grupp does not leave a good hair on the role of entrepreneur Benko at Galeria. “Mr. Benko put the land and the real estate company in one pocket and the operating company in the other pocket. And he let the operating company go bankrupt twice,” notes Grupp. “Where is his responsibility towards the employees?” Around 17,000 employees work at Galeria Karstadt Kaufhof.
Benko does not only assume no responsibility towards the employees. According to Grupp, “the interests of the creditors are also not well represented.” In the first insolvency proceedings, the creditors had to waive claims of around two billion euros when they approved the restructuring plan. At the time, the insolvency plan stated that “all branches” were rented by the department store group, so they were not available as values ??for the claims of creditors. However, 59 of the department store properties were owned by Signa.
In addition, Galeria has received a total of 680 million euros in state aid from the Economic Stabilization Fund. More money from the taxpayer is no longer to be expected. Therefore, the chief representative Arndt Geiwitz, who is managing the renovation on behalf of Benko, said a few weeks ago: “The aim of all measures must be to create a viable structure under changed conditions.”
It is not yet clear what “out of yourself” means for companies and employees and whether the owner Benko is involved. According to “Handelsblatt”, Signa did not respond to such inquiries.
Grupp contrasts Benko’s behavior with his own role as a personally liable businessman. Such a person is liable with all his assets for the liabilities of his company and, in the event of insolvency, cannot get any real estate or other assets dry. Grupp demands that this should be the norm. Entrepreneurs and possibly also managers would also have to be financially liable for their decisions, he told the “Handelsblatt”. Benko’s behavior at Galeria is “not compatible with my understanding of the law”.
However, Grupp would like to be rewarded for taking on such responsibility: Liable entrepreneurs like himself should receive a 50 percent income tax rebate, “then they would certainly act more responsibly,” he is convinced. It’s like car insurance: “Insurance with a deductible is also cheaper than one with comprehensive insurance.”
Grupp, whose company has long supplied department stores, was not surprised that the last German department store group was in trouble. Grupp remembers times when he “mentally rolled out the red carpet” when a Karstadt representative came to Trigema in Burladingen. At that time it was about orders worth millions. But decades ago he noticed that the department stores were going downhill. At first the Karstadt buyer ordered less, then he demanded lower prices. “I have to sense when the customer has problems, and I noticed that at Karstadt decades ago,” summarizes Grupp.
Trigema finally ended the business relationship with Karstadt and gradually switched to selling in its own stores. Today, the company operates 42 of its own branches and, unlike all its competitors, who continue to supply the trade, produces in Germany. “It would be fatal if we were still a supplier to Galeria Karstadt Kaufhof today,” Grupp sums up.
