Concessions from landlords
Five Galeria branches are not closing after all
03/16/2023 1:07 p.m
Breathe a sigh of relief in five cities: Contrary to previous plans, Galeria Karstadt Kaufhof will not close five branches after all. As for the remaining 47 locations affected by a closure, there are encouraging signs. The fashion chain Aachener wants to step into the breach with some.
Galeria Karstadt Kaufhof will close five fewer department stores than announced at the beginning of the week. Thanks to further concessions by the landlords, the department stores in Bayreuth, Erlangen, Oldenburg, Rostock and Leipzig were retained, said a company spokesman. The number of planned branch closures at Germany’s last large department store group is reduced to 47. The number of continued stores increases to 82.
There had recently been encouraging signals for employees from other quarters as well. The managing director of the Aachener fashion chain, Friedrich-Wilhelm Göbel, said he was interested in several locations threatened with closure. There is currently no contractual arrangement with Galeria, but mutually signed contracts with landlords, said the manager. These take effect as soon as Galeria receives a notice of termination – which has not yet happened.
Göbel promised that “all employees in the affected branches would be offered the opportunity to work for us. Without exception.” Regarding the number of houses that are to become Aachen branches, Göbel said: “I think it will be ten. It could also be 25.” According to him, it is about branches throughout Germany. Aachener currently operates seven branches in Rhineland-Palatinate, Hesse, North Rhine-Westphalia, Baden-Württemberg and Schleswig-Holstein. Göbel was previously the head of the fashion chain Sinn.
Creditors’ meeting still has to give the green light
Galeria announced on Monday that it would close 52 of the last 192 department stores. Thousands of jobs are also to be cut in the course of the ongoing insolvency proceedings. The department store group had to seek rescue in a protective shield insolvency procedure at the end of October. At the time, CEO Miguel Müllenbach named the exploding energy prices and the slump in consumption in Germany as the reason for the threatening situation of the company. However, the general works council also blamed management errors for the group’s crisis.
According to the plans of the department store group, the remaining branches are all to be comprehensively modernized over the next three years. In the future, the group intends to focus its product range primarily on the areas of clothing, beauty care and home accessories. The branches should also be given more autonomy when designing their product range.
With a view to the planned package of measures, Galeria boss Miguel Müllenbach said: “The department store in Germany has a future.” However, before the restart, the creditors’ meeting on March 27th in Essen must give the green light. If she rejects the insolvency plan, the company is threatened with immediate collapse.
It is already the second attempt to get the retail giant back on the road to success with a protective shield procedure and the associated haircut. A first attempt, which started in 2020 during the first corona lockdown, brought only temporary relief to the company, despite the closure of around 40 branches, the loss of around 4,000 jobs and the cancellation of more than two billion euros in debt.