“Profitable business is almost impossible”: German department store group KaDeWe Group files for bankruptcy

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This step came after many media outlets speculated about it. An application was made for bankruptcy proceedings under self-government. The trading company emphasized that the rents in three locations in particular make things difficult. “They have made sustainable, profitable economic activity almost impossible,” it said. The Lamarr store on Vienna’s Mariahilfer Street, which is currently under construction, is also part of the bankruptcy.

Companies that have good prospects of continuing their business operations often file for bankruptcy under self-administration rather than with the assistance of an insolvency administrator. It is a type of bankruptcy law that aims to restructure a company rather than liquidate it.

The bankruptcy of trading company The KaDeWe Group GmbH comes just weeks after Austrian investor René Benko’s Signa network of companies ran into difficulties. Signa has a stake in the KaDeWe Group.

50.1 percent of the KaDeWe Group belongs to Central Group, which belongs to the Thai Chirathivat family, and 49.9 percent belongs to Switzerland-based Signa Retail, which includes Galeria Karstadt Kaufhof. Signa Retail has announced that it will terminate its business in an orderly manner at the end of November. Galeria Karstadt Kaufhof filed for bankruptcy three weeks ago.

Index rents in department stores are “disproportionately high” KaDeWe managing director Michael Peterseim was still confident at the end of November that the group would not be caught out in the wake of the Signa crisis. “We are doing an outstanding job operationally. “Sales of all homes are increasing even in difficult economic times,” Peterseim said, according to the announcement.

“But index rents are disproportionately high, out of line with the market, and expected to continue rising.” Numerous conversations with the landlord changed nothing. The KaDeWe Group operates traditional department stores in Berlin, Hamburg and Munich. René Benko is his host through Signa.

According to the announcement, the KaDeWe Group achieved sales of approximately 728 million euros in the 2022/2023 financial year, an increase of almost 24 percent compared to the pre-Corona financial year 2018/2019. The group employs around 900 people at KaDeWe in Berlin. There are also approximately 200 employees at Alsterhaus, 300 at Oberpollinger and 300 at the Berlin headquarters.

Johannes Berentzen, head of business consultancy BBE, estimates that KaDeWe Group’s rent burden will be between 13 and 20 percent of sales, depending on location. “For majority owner Central, bankruptcy could be beneficial to get rid of expensive leases.” Berentzen emphasized: “I am confident that business will continue in all three houses.” Luxury works well despite the economic situation.

However, during the shopping in Berlin on Sunday, January 28, KaDeWe’s doors remained closed, contrary to what was originally planned. Customers at the door were not told the reasons.

In the case of self-management bankruptcy, the management remains in office but a nominal administrator is appointed from outside. For this reason, the old management retains most of the savings authority over the company. At the same time, the company is protected against enforcement and coercive measures by creditors. (SDA)

Source :Blick