Closing branches, cutting jobs – but also modernizing with up to 100 million euros: these are the plans of the new Galeria owners. They also want more shopping on Sundays.
The new owners of Galeria Karstadt Kaufhof want to invest up to 100 million euros over the next two to three years to modernize the remaining department store branches. The dpa news agency found out from those close to the owners. Der Spiegel first reported about it.
Since it was announced in April that a consortium made up of the US investment company NRDC and the entrepreneur Bernd Beetz’s investment company BB Kapital SA wanted to take over Galeria, there has been some bad news for employees. 16 of the 92 existing department stores are to close and 1,400 of 12,800 jobs are to be lost.
The plan: Open once a month on Sunday
Now the new owners have said for the first time how much money they want to invest in the department store chain and in which direction it should move forward. As Spiegel reported, citing the investor environment, Galeria is relying on Sunday shopping for its realignment.
The proposal: In the future, every house could open once a month, including on a Sunday. As a crowd puller, Galeria could contribute to the revitalization of city centers and increase its own sales. The owners would hope for support from the states and municipalities.
Less investment than last planned
The 100 million euros that have now been promised are less than the previous Galeria owner, the Austrian entrepreneur René Benko, had promised last year. He wanted to spend 200 million euros on the renovation, half of it as a loan.
However, apart from one million euros in share capital, no money flowed due to the difficulties of Benko’s Signa Group. As a result, Galeria got into difficulties and filed for bankruptcy at the beginning of January. It is the third bankruptcy within three and a half years.
According to experts, more than a billion euros are needed
According to experts, the new owners’ investments are not enough. Retail expert Carsten Kortum sees a significant investment backlog at Galeria. Only ten department stores have been modernized so far. The remaining 66 branches would need an average of 20 million euros per branch, estimates the professor at the Baden-Württemberg Cooperative State University in Heilbronn. In total, investments of more than one billion euros are necessary.
It is still unclear whether the takeover by NRDC and Beetz will take place. This will be clarified on May 28th at the Essen District Court, when the creditors vote on the insolvency plan and it then has to be confirmed again by the court. The insolvency administrator wants to hand over the company to the new owners by the end of July.