Galeria Karstadt Kaufhof is bankrupt for the third time in just a few years. The department store group filed for insolvency at the Essen district court on Tuesday. In contrast to the two previous self-administered restructurings, Galeria is now going into regular insolvency. The district court appointed Hamburg lawyer Stefan Denkhaus from the law firm BRL Boege Rohde Luebbehuesen as the provisional insolvency administrator. Denkhaus is also the spokesman for the Gravenbrucher Kreis, in which the leading national insolvency administrators have come together.
This means that the future of the more than 15,000 employees and the 92 remaining department stores is once again uncertain. In the bankruptcies in 2020 and 2022, dozens of branches were closed and thousands of employees lost their jobs. Creditors gave up billions in each case. Even now, experts expect tough cuts. Galeria, on the other hand, announced that the branches and online business would be continued “in full”.
Looking for a new owner
The department store group blamed the difficulties of its parent company Signa for its own difficulties and is seeking a change of ownership. The first quarter of the current 2023/2024 financial year was above the previous year's figure. “However, the numerous insolvencies of the Signa Group are causing massive damage to Galeria, hindering ongoing business and severely restricting future development opportunities through high rents and expensive services,” Galeria announced on Tuesday.
“The Signa Group’s bankruptcies have thwarted Galeria’s good development and threaten the company,” the insolvency administrator Denkhaus was quoted as saying in a company statement. “The management therefore had no other option than to free the company from this grip through insolvency.” Breaking up the company was “expressly not the aim of the proceedings”.
Discussions with potential investors for a takeover were already underway. Who that could be is questionable. The Düsseldorf investment company Droege was named in media reports, but a spokeswoman for the group, which includes Weltbild-Verlag and the Austrian personnel consultancy Trenkwalder, denied this. Other retailers such as Breuninger would probably only be interested in individual branches. A possible interested party is likely to be the Central Group, which has been an important investment partner of the ailing Signa Group for some time. The Thais already hold the majority in the KaDeWe Group, which, in addition to the luxury department store of the same name, also includes the Alsterhaus in Hamburg and the Oberpollinger in Munich.
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