KaDeWe Group files for bankruptcy. IEA boss calls for government action against the SUV trend

The KaDeWe Group with the luxury department stores KaDeWe in Berlin, Oberpollinger in Munich and Alsterhaus in Hamburg has filed for bankruptcy. However, the company told the German news agency on Monday that the houses’ activities will continue. This move came about after several media houses speculated about it.

An application has been submitted for self-administration insolvency proceedings. The trading company emphasized that the rents at the three locations in particular put pressure on the business community. They made “sustainable, profitable economic activity almost impossible,” it said. The Lamarr department store on Vienna’s Mariahilfer Strasse, which is still under construction, is also part of the bankruptcy.

Companies that have good prospects for continuing their business activities usually file for bankruptcy under their own management rather than with the help of a trustee. It is a variant of insolvency law that aims to restructure a company rather than liquidate it.

The bankruptcy of trading company The KaDeWe Group GmbH follows a few weeks after the Signa company network of Austrian investor René Benko got into trouble. Signa has an interest in the KaDeWe Group.

50.1 percent of the KaDeWe Group belongs to the Central Group of the Thai Chirathivat family and 49.9 percent to the Swiss-based Signa Retail, which also includes Galeria Karstadt Kaufhof. Signa Retail announced at the end of November that it would wind down the company in an orderly manner. Galeria Karstadt Kaufhof filed for bankruptcy proceedings three weeks ago.

Rental prices too high

Index rental prices for department stores “disproportionately high” KaDeWe director Michael Peterseim was still confident at the end of November that the group would not be caught in the aftermath of the Signa crisis. “We are doing an excellent job operationally. “All homes show increasing sales, even in difficult economic times,” Peterseim said, according to the announcement.

“However, index rents are disproportionately high, not in line with the market – and are expected to continue to rise.” Numerous conversations with the landlord did not change this. The KaDeWe Group is the operator of traditional department stores in Berlin, Hamburg and Munich. René Benko is her landlord through Signa.

According to the announcement, the KaDeWe Group generated a turnover of almost 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 approximately 900 people at KaDeWe in Berlin. There are also approximately 200 employees in the Alsterhaus, 300 in Oberpollinger and another 300 employees in the headquarters in Berlin.

Consultant: Luxury continues to work

The head of trade consultancy BBE, Johannes Berentzen, estimates the KaDeWe Group’s rental costs at between 13 and 20 percent of turnover, depending on the location. “For majority owner Central, bankruptcy could be worth getting out of expensive leases.” Berentzen emphasized: “I am confident that business will continue in all three houses.” Luxury works well despite the economic situation.

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

In the event of insolvency under your own management, the management remains in office, but is assigned a so-called administrator from outside. The old management therefore retains a large part of the control over the company. At the same time, the company is protected from enforcement and coercive measures by creditors. (cst/sda/awp/dpa)