Friday 15th January 2021
Cost too high in lockdown
Karstadt-Kaufhof probably needs state aid
The crisis at Galeria Karstadt Kaufhof does not seem to end. The ailing chain of department stores carried out a massive deforestation last year. Due to the current branch closings, the group is apparently again negotiating government support.
According to a "Spiegel" report, the ailing department store group Galeria Karstadt Kaufhof has apparently been negotiating financial aid with the federal government since this week. The company wanted a subordinated loan of "well below half a billion" to cover the running costs, reported the "Spiegel" in advance, citing people familiar with the negotiations.
Until a few days ago, the company assumed that it would make ends meet with its own resources by the end of January, wrote the "Spiegel". In the meantime this hope has faded. "If we suddenly talk about closing the shops for another eight to ten weeks, then no non-food company can survive without government aid," says the report at Galeria Karstadt Kaufhof. "We look into the tube with the general help."
According to "Spiegel", the largest German department store group is well above the limit of 500 million euros in annual sales for Bridging Aid III. At the same time, online business is barely getting off the ground and still only accounts for a few percent of total sales of around two billion euros a year.
Galeria Karstadt Kaufhof had already negotiated federal aid at the beginning of the corona crisis, but then fled into a protective shield procedure under self-administration. The group completed the process at the end of September. According to "Spiegel", two billion euros in debts were reduced, and owner René Benko provided over 400 million euros in fresh capital. In the meantime, however, this money has probably been used up, wrote the magazine. The Federal Ministry of Economics neither wanted to confirm nor deny the talks.
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