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Food. Galeria Karstadt Kaufhof has cleared the last major hurdle to its rescue. The creditors' meeting at Messe Essen on Tuesday approved the plan to restructure the ailing department store chain, as reported by Insolvency administrator Stefan Denkhaus announced.
The insolvency proceedings are thus formally about to be concluded. Following the end of the objection period, the competent Essen district court can terminate the proceedings in June. The way is then finally clear for the restructuring of the retail giant and the takeover by the new owners: the US investment company NRDC and the holding company of entrepreneur Bernd Beetz, who was CEO of the cosmetics group until 2012. Coty was. Denkhaus would like to hand it over to her in July.
Branches close across Germany
The employees already have clarity for the most part. The trembling after the third insolvency in less than four years has come to an end for the time being. Contrary to what many retail experts had predicted, Galeria is still going strong. Nevertheless, the company and its employees are once again paying a high price. Once again, stores are closing across Germany and 1400 people are losing their jobs.
The Verdi trade union erected a symbolic wooden cross in front of the trade fair building for each closing branch. "Mr. Beetz, invest in the team," reads one of the posters. Another reads: "Benko, thank you for nothing!" The cut at Galeria is nowhere near as deep as expected. Experts had predicted in January that at most 20 to 30 locations would be retained. Many expressed doubts that an interested party would even be found.
Creditors waive a lot of money again
Around 120 people representing around 4,600 creditors took part in the non-public event in Essen on Tuesday. By accepting the insolvency plan, they will once again have to forego a lot of money. In recent weeks, landlords, suppliers and other creditors such as the federal government have registered claims amounting to 886.1 million euros. It is expected that only up to 22.5 million euros - or 2.5 to 3 percent - will flow back to them. Payments from the claims against the previous owner, the Signa Group of entrepreneur René Benko, could increase the quota even further. Galeria slipped back into insolvency at the beginning of the year because the financially ailing parent company failed to provide the promised aid.
More money is returned to the Economic Stabilization Fund (WSF). The state stabilization fund had supported Galeria with 680 million euros in 2021 and 2022. A large part of the claims were dropped in the course of the insolvency proceedings concluded in 2023. A subordinated loan in the amount of 88 million euros was continued. As new collateral was agreed in the event of a default, the WSF has "preferential rights of separation" from the insolvency estate. The responsible finance agency expects that the claims will now be met in full. No further defaults are expected in the course of the new insolvency.
Karstadt and Kaufhof disappear from the name
The insolvency administrator laid the foundation for the new start. Denkhaus' main aim was to make the Group more medium-sized. The company headquarters in Essen will be given up. The administration is to move into a branch in Düsseldorf in 2025 - significantly streamlined. Of the 92 branches, 76 will remain. According to reports, this will reduce the rent burden by around 80 million euros per year. The name is also changing. In future, the department store chain will simply be called Galeria, and the large, traditional Karstadt and Kaufhof brands will disappear. They are said to be too closely linked to the recent bankruptcies.
And yet doubts and uncertainty have not disappeared even with the creditors' yes. This is also due to the fact that many important questions remain unanswered. How can Galeria get back on the road to success? How can it hold its own against retail giants such as Amazon and new portals such as Shein and Temu? And how can the department store company be prevented from getting into difficulties again in 2025?
Beauty products, handbags, shoes and underwear will be the main focus of the range. This was announced by Galeria boss Olivier Van den Bossche recently. Not much more is known about the future course. The new owners have so far kept a low public profile. They said they wanted to wait until the proceedings had been completed. However, Beetz has recently been heavily involved in the background. For example, he campaigned for the Galeria store in Mannheim, which is on the closure list, to remain open. Beetz has close ties to the city, he grew up in Mannheim and is president of the local Third division soccer club SV Waldhof. It is not yet clear whether this location and others will be removed from the list.
"New owners must show that they are serious"
The decisive factor will be what Beetz and the investment company NRDC, led by former Kaufhof owner Richard Baker and his son Jack, invest in the department store chain. The insolvency plan states that they have pledged "extensive financial resources" for restructuring and realignment, but not how much. "The new owners still have to show that they are serious. This is not clear from the insolvency plan," said insolvency expert Manfred Hunkemöller.
Up to 100 million euros are to flow in over the next two to three years, according to sources close to the investors. Whether this will be enough is at least questionable. Retail experts estimate that Galeria needs to invest over one billion euros. The future of the department store company therefore remains unclear. However, one thing is certain: Galeria has been given another chance. (dpa)
