Closures at Galeria Karstadt Kaufhof: “Clear expectations of the owner”

The trade union ver.di wants to fight for every job at Galeria Karstadt Kaufhof and formulates expectations for owner Benko. Germany’s last major department store chain wants to close a third of its 131 branches.

After the announcement of numerous branch closures at Galeria Karstadt Kaufhof, the ver.di union wants to fight for jobs at Germany’s last large department store chain. “For us, it’s now about getting as many jobs as possible,” said federal board member Stefanie Nutzberger. In view of the slump in consumption and energy prices, the retail giant had sought rescue in a protective shield procedure and announced that it would close at least a third of its remaining 131 department stores. Layoffs for operational reasons are unavoidable.

Commitment demanded from Galeria owner Benko

Nutzberger called for greater commitment from the Galeria owner, Austrian real estate billionaire René Benko, to rescue the company. “Our colleagues in the 131 department stores are wondering where the owner is in this extremely existentially threatening situation for 17,400 people and their families.” Additional money is now needed for the company. “There are clear expectations of the owner.”

In addition, the group management must present a viable concept for the future. “The employees made many concrete suggestions for a successful future, which were not listened to by the management,” said Nutzberger. Ver.di asked the management to enter into negotiations immediately.

Already the second protective shield procedure

Already during the first corona lockdown in April 2020, the department store group that emerged from the merger of Karstadt and Kaufhof had to seek rescue in protective shield proceedings. This involved severe cuts: the closure of around 40 of the then 172 branches, the reduction of around 4,000 jobs and the cancellation of more than two billion euros in debt should enable the company to restart.

Galeria had started to convert the remaining branches under the motto “Galeria 2.0”. But this plan got stuck in the early stages given the precarious situation. The pandemic has meant that fewer people are generally out and about in the city centers and shopping less at stationary retailers, wrote managing director Miguel Müllenbach in a letter to the workforce available to Reuters. “And to this day there is no real trend reversal.”

In early 2021 and early 2022, the shrunken retail giant had to ask for government support in the face of the pandemic. Overall, the economic stabilization fund helped the group with a total of 680 million euros. Renewed state aid does not make sense, explained Müllenbach in the “Frankfurter Allgemeine Zeitung”. The company cannot pay them back in the foreseeable future.