Retail trade Court lifts insolvency proceedings for German department store Galeria
Germany's last major department store group Galeria can venture a new start. The Essen District Court announced that the insolvency proceedings had been lifted at the end of the month.
29.07.2024, 13:29
SDA
On August 1, the former Galeria Karstadt Kaufhof (GKK) will start operating under the new company name Galeria. Nine stores will still be closed in August, and on September 1 it will continue with 83 locations - this number of stores is to remain permanently.
According to the company, which has around 12,000 employees across Germany, the insolvency proceedings have been successfully concluded after just under seven months with the implementation of the insolvency plan. On August 1, the US investment company NRDC and a holding company owned by entrepreneur Bernd Beetz will become the new owners of the group.
Demonstrative confidence
Insolvency administrator Stefan Denkhaus is optimistic about the future of the company. It has been possible to reduce costs to a reasonable level in many areas, says the lawyer. "As a medium-sized company, Galeria is now in a good economic position and is starting the future with available liquidity in the nine-figure range."
In politics, new governments are usually given a grace period of 100 days. "I would like to see Galeria get the same with its new owners," says Denkhaus. "Ideally 300 days to implement the future concept step by step."
New owner Bernd Beetz says that thanks to the efforts of all those involved, a basis has been created that gives the company clear prospects for the future. "We will now work closely with the management and staff to launch a new corporate culture."
Concepts should be implemented to make stores more attractive, reward performance more strongly and increase customer satisfaction. "We are thus building a new, self-confident Galeria, whose 83 locations in city centers are an important and reliable anchor tenant as well as a source of footfall for surrounding specialist stores and restaurants," says Beetz.
The department store group recently sold its 70 travel agencies to ADAC. Galeria will concentrate on its core competence as a department store, says CEO Olivier Van den Bossche. "There will also be store modernizations to offer an attractive shopping atmosphere and an ideal shopping experience."
Twice as many stores in 2020
The department store group is going through a crisis, which is also due to the boom in online retail and the associated decline of shopping streets in city centers. In the 1990s, there were still several competing department store operators in Germany, then market concentration began: Kaufhof swallowed Horten and Karstadt took over Hertie.
Karstadt went bankrupt in 2009, and the situation remained tense even after that. In 2018, the former rivals merged to form Galeria Karstadt Kaufhof. The shrinkage continued: while there were still 171 stores in 2020, there are now less than half of them.
The previous owner of Galeria, Austrian entrepreneur René Benko, pledged 200 million euros for the restructuring of Galeria last year, half of which was in the form of a loan. However, apart from one million euros in share capital, nothing has flowed due to the imbalance of Benko's Signa Group. As a result, Galeria got into difficulties and filed for insolvency at the beginning of January. It is the third insolvency in three and a half years.
