The Essen district court has opened insolvency proceedings for the ailing department store group Galeria Karstadt Kaufhof. This emerges from an announcement by the court on the portal insolvenznachrichten.de.
With the opening of insolvency proceedings on April 1st, creditors can register their claims against Galeria Karstadt Kaufhof. The department store chain currently has 92 branches and, according to its own information, employs 12,800 people. Attorney Stefan Denkhaus, who had previously only been appointed as a provisional administrator, was appointed as the insolvency administrator.
With the opening of the proceedings, Denkhaus takes over Galeria’s business. He wants to complete the sale sometime in April. Discussions with a possible new owner for the company are already underway. After the offer deadline had expired a week ago, Denkhaus announced that there were four bidders, two of which should be finalized in negotiations. “Both interested parties have extensive experience in German retail and also have the funds required for the upcoming investment,” Denkhaus said. He did not name the possible investors.
Insolvency administrator Stefan Denkhaus.
(Photo: Rolf Vennenbernd/dpa)
The final decision on a takeover by a new owner is made by the meeting of creditors. According to the announcement, this will meet on May 28th at Messe Essen to vote on the insolvency plan drawn up by Denkhaus.
Many Galeria branches could close
At the beginning of January, Galeria filed for insolvency with the Essen district court. It is the third bankruptcy within three and a half years. The number of branches of the department store chain has halved during this period; there are currently 92 left. How many remain is still open. According to Denkhaus, it will involve taking over at least 60 plus X branches. “We don’t yet know how big this X is,” he said last week.
If 60 branches remained after the sale, about one in three would close. Many employees therefore have to fear for their jobs. “We try to maintain the best possible branch network and really fight for every branch,” said Denkhaus. The number of remaining Galeria locations depends primarily on the ongoing negotiations with the landlords.
Insolvency administrator wants to reduce rents
The insolvency administrator’s goal is to reduce rents. Depending on the branch, he aims for a sales rent of seven to eleven percent, or a little more if business is doing particularly well. “It makes no sense to continue operating a branch with a rent burden of more than 30 percent.”
In the branches that are located in properties owned by Signa, the rents are often significantly higher. According to its own information, the company pays up to 30 percent of sales there. Denkhaus had already announced in January that it would close branches if there was no accommodation from the landlord.