Department store chain in crisis: Apparently new state aid for Galeria

According to a newspaper report, the department store group Galeria is to be supported once again with a large loan from the state. The chain is struggling with the consequences of a sharp drop in customer numbers.

The department store group Galeria apparently receives another multi-million dollar state loan. According to a report by the “Handelsblatt” is about 240 million euros. The money is to come from the Economic Stabilization Fund. This fund was introduced at the beginning of the Corona crisis to rescue companies in need.

The department store chain Galeria, which has had financial worries for a long time, has seen a massive drop in customers as a result of the pandemic – according to its own statements, mainly because of the 2G rule in retail. According to the company, sales fell by 40 percent during the important Christmas business. The online business could not even come close to compensating for the minus.

High credit already granted in 2021

If the Federal Ministry of Economics gives the green light, it would be the second state loan to Galeria Karstadt Kaufhof. The group had already received a loan of 460 million euros at the beginning of last year.

The decision on a new cash injection is said to have been preceded by tough negotiations – above all the question of how much the group’s owner René Benko would contribute to the rescue operation. Benko should now pay a contribution of 15 percent. This has now been agreed, according to the “Handelsblatt”. Neither the Federal Ministry of Economics nor Galeria itself have commented on the credit plans on request.