Press
Galeria Karstadt Kaufhof is facing its third bankruptcy. Job cuts and branch closures are on the horizon. A period of uncertainty begins for the workforce.
Essen – The third bankruptcy is causing unease at the headquarters of Galeria Karstadt Kaufhof. The department store chain continues to struggle with significant financial difficulties. The pressure on the company and its employees is increasing. According to the Food newspaper As part of the third insolvency proceedings, those responsible are working on drawing up a social plan and a reconciliation of interests. For this approach, further cuts are unavoidable. The employees of Galeria Karstadt Kaufhof have already been informed about the possibility of significant job cuts at the headquarters. The branches are also affected – it could new closures are imminent.
Branch closures in prospect
Those responsible, including insolvency administrator Stefan Denkhaus, managing director Olivier van den Bossche and Guido Mager, are currently taking care of the company’s problems and are responsible for communicating with employees. In a letter they announced to the Galeria Karstadt Kaufhof staff that there would be branch closures.
In the two previous insolvency proceedings, branch closures were also usedwhich resulted in the number of outlets falling from around 170 to 92. Restructuring measures and staff reductions are also among the planned changes. For long-term business success, the department store chain needs several restructuring measures. The redesign of Galeria Karstadt Kaufhof requires a modernization of the department store concept, including increased investment in IT infrastructure and improving logistics.
The drastic cuts and branch closures are due to the insolvency of entrepreneur René Benko’s Signa Holding. Signa-Holding GmbH is an Austrian real estate company and holds 51.01 percent of the shares in Galeria Karstadt Kaufhof. In December 2023, Signa-Holding filed for bankruptcy, which also led to the department store chain’s third bankruptcy. There have been many bankruptcies within the Signa Group for months.
New investor in prospect?
The department store chain is currently expecting a new investor. However, this could not take over all branches. A purchase agreement is expected to be drawn up in March, with a deadline of March 22nd. The deadline for submitting binding offers for the company expires on this day.
In January 2024, the company initiated a structured investor process with the approval of the provisional insolvency administrator Stefan Denkhaus and the provisional creditors’ committee. For this purpose, it brought in experienced investment banks. As the daily News reported that interested parties should submit a detailed business concept to the department store chain. Only interested parties who have an operational interest in Galeria and who strive for a sustainable solution for the department stores are taken into account in the selection process.