Germany's last major department store group Galeria Karstadt Kaufhof wants to close 52 of the remaining 129 department stores, according to the General Works Council. "In total, well over 5000,<> employees will lose their jobs," the company's employee representatives reported on Monday. "This is a black day," stressed the works council. Galeria was initially unable to comment. The Group's Supervisory Board was scheduled to meet in the afternoon.
Most recently, the official requirements in the Corona crisis had burdened the business, the group resorted to state aid, then the branches suffered from the reluctance of consumers after the Russian attack on Ukraine. In addition, home-made problems caused problems for the group, which belongs to the billion-dollar Signa Holding of the Austrian investor Rene Benko, which had merged Karstadt and Kaufhof.
At the end of October, Galeria Karstadt Kaufhof had to seek rescue in protective shield insolvency proceedings for the second time within less than three years. In an employee letter at the time, CEO Miguel Müllenbach cited the exploding energy prices and the slump in consumption in Germany as the reason for the company's threatening situation. From the outset, the manager left no doubt that the renewed restructuring would be associated with considerable cuts in the branch network and significant job cuts.
Already second attempt
It is already the second attempt to bring the retail giant back on the road to success through a protective shield procedure and the associated debt haircut. A first attempt, which was launched in 2020 during the first corona lockdown, had brought the company only temporary relief despite the closure of around 40 branches, the reduction of about 4000,<> jobs and the cancellation of more than two billion euros in debt.
Already at the beginning of 2021 and again at the beginning of 2022, the shrunken retail giant had to ask for government support in view of the pandemic. Overall, the Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with 680 million euros – without success.
Galeria's general representative Arndt Geiwitz, who had already accompanied the first protective shield proceedings as a restructuring expert, was recently confident that there was still a perspective for the department store group thanks to the second protective shield proceedings. "I am convinced that Galeria department stores have a future, even if not in their current form," the renovator emphasized in an interview. However, the retail giant would have to become smaller and more decentralized. Galeria will hopefully make a profit again "in three calendar years". Previously, further losses were certainly incurred due to the restructuring costs, for example for conversions.