Galeria Karstadt Kaufhof closes 52 department stores in Germany

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The company’s employee representatives reported this on Monday. “This is a pitch dark day,” the works council emphasized.

The background: Galeria Karstadt Kaufhof had to seek rescue in insolvency proceedings with a protective shield for the second time in less than three years at the end of October. In a letter to employees at the time, CEO Miguel Müllenbach cited exploding energy prices and the slump in consumption in Germany as the reason for the company’s threatening situation.

From the start, the manager left no doubt that the renewed restructuring would entail a major reduction in the branch network and significant job losses.

It is already the second attempt to get the retail giant back on the road to success with a protective shield procedure and the accompanying haircut. A first attempt, which was launched in 2020 during the first corona lockdown, brought the company only temporary solace, despite the closure of about 40 branches, the loss of about 4,000 jobs and the cancellation of more than two billion euros in debt.

In early 2021 and again in early 2022, the shrunken retail giant had to ask for state aid in view of the pandemic. In total, the Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with 680 million euros – without success.

Galeria’s general representative, Arndt Gproteinz, who as a restructuring expert had already supervised the first protective shield procedure, was recently confident that the second protective shield procedure still offered perspective for the department store group. “I am convinced that the Galeria department stores have a future, even if not in their current form,” the renovator emphasized in an interview.

However, this would require the retail giant to become smaller and more decentralized. Galeria will hopefully turn a profit “in three calendar years”. Before that there have certainly been further losses due to the restructuring costs, for example for conversions.

(SDA)

Source: Blick