The new list is not yet public. But according to information from… South German newspaper 16 Galeria branches are to be closed this time. The SZ learned this from two people familiar with the insolvency proceedings. The insolvency administrator Stefan Denkhaus has delivered in this respect. At a press conference in mid-April, together with the designated new owners of the department store chain, Bernd Beetz and Richard Baker, he said that a good 70 of the remaining 92 branches should be retained. Now there are 76 department stores that are being continued.
Insolvency administrator Stefan Denkhaus had awarded Beetz and Baker the contract in a months-long bidding process because they were the investors who guaranteed the existence of most of the branches. Denkhaus and the investors are now even exceeding their promise. Instead of 22, 16 branches are to close. The break-up scenario is now off the table.
But the news also means that cities will once again have to deal with the threat of vacancies in prominent locations in the city. In addition, the closure of 16 branches also means the dismissal of 1,400 employees, as the SZ learned. On the other hand, Galeria remains a company with more than 10,000 employees. The 1,400 layoffs include the 450 employees at the Essen headquarters. That’s half of the employees there. Insolvency administrator Denkhaus had already announced this in mid-April. There is no guarantee of employment for employees.
Galeria managers point out that workers in retail are currently in demand. However, experience also shows that many former Galeria employees are looking for a new industry. In Nuremberg, for example, says one affected person, out of 60 people who quit as part of the previous insolvency proceedings, only three went back into retail. Galeria has gone through three insolvency proceedings since April 2020.
On the other hand, these proceedings also made it clear that being on the “closure list” does not automatically mean the final closure for the branches. Branches can also be saved after publication. A person familiar with the process said that the actions of Denkhaus and the designated new owners Beetz/Baker could also be understood as an announcement that they would now enter into even tougher negotiations about the amount of the rent. At some locations, these are said to have lasted until the last minute.
Galeria boss Olivier van den Bossche had repeatedly said that rents should be between seven and eleven percent of sales. In the Cologne Hohe Straße branch, the rent was recently at 33 percent of sales. The department store on Hohe Straße, like 17 other of the 92 stores, belongs to the insolvent Signa Group of the Austrian entrepreneur René Benko. Signa had increased rents above average in recent years and thus increased the value of the properties. However, the hoped-for sales in the branches were not achieved. As a result, rents accounted for an ever-increasing share of sales, which made operating the branches uneconomical. As several people confirmed, Signa is said to have proven to be cooperative in the negotiations this time. There are said to be only a few Signa locations among the 16 branches to be closed.
Denkhaus and the investors’ calculation is to use the closure list to persuade other landlords to give in. The number of 76 branches saved could theoretically increase in the next few days and weeks. On the other hand, Beetz also made it clear at a press conference at the Galeria headquarters in Essen in mid-April that no protection of the department stores over a certain period of time had been agreed with the insolvency administrator. Department stores that are not profitable could therefore be sold in the coming years.
Everything is said to have been negotiated so that each of the 76 branches delivers a positive contribution margin. The remaining department stores should therefore no longer make losses. In addition, further costs should be saved. The high rent of four million euros for the headquarters in Essen is to be eliminated by Galeria moving to cheaper premises. This should happen next year. Galeria boss Olivier van den Bossche said he would prefer the administration to be moved to the upper floors of a branch. This also has the advantage of being close to the retail store and customers. The previous administration building is located in a remote suburb of Essen. Savings should also be made in logistics.
The list of the 16 affected department stores will be officially announced on Saturday morning. The reason: There should be enough time to inform the cities and employees. A social plan and a reconciliation of interests have been agreed with the general works council and the union. Part of this is setting up a transfer company. It is assumed that the affected 16 branches will not open this Saturday. However, operations should continue on Monday.
The recent closures mark another bitter blow for department stores in Germany. Galeria Karstadt Kaufhof is the last remaining department store chain in the country. But Galeria had also gone downhill rapidly over the past ten years. In 2014 there were still 290 Karstadt and Kaufhof branches. In 2019 there were 243 branches with 32,000 employees. The decline was accelerated after the takeover of the Austrian real estate dealer René Benko, which sent the department store chain into bankruptcy three times after 2020. In 2022, after the first bankruptcy, there were still 131 branches and 17,000 employees and in 2024, after the second, only 92 branches and around 12,000 employees.
The creditors’ meeting still has to officially approve the ongoing proceedings at the end of May.