Galeria Karstadt Kaufhof before new branch closures
Galeria Karstadt Kaufhof has to close even more department stores.
(dpa) Germany’s last major department store group, Galeria Karstadt Kaufhof, is again seeking rescue in protective shield proceedings. This was announced by a company spokesman on Monday (October 31) in Essen. The retail giant is facing further branch closures. Galeria boss Miguel Müllenbach told the “Frankfurter Allgemeine Zeitung” that the branch network had to be “reduced by at least a third” as part of the protective shield procedure. Layoffs are unavoidable. With 17,000 employees, the group currently operates 131 department stores in 97 German cities. The “Wirtschaftswoche” also reported on the protective shield procedure.
It is the second time in less than two years that the department store group that emerged from the merger of Karstadt and Kaufhof has had to go to insolvency court. Because already during the first corona lockdown in April 2020, the company had to seek rescue in a protective shield procedure. The insolvency proceedings lasted until the end of September.
This involved severe cuts: the closure of around 40 branches, the reduction of around 4,000 jobs and the cancellation of more than two billion euros in debt should enable the company to restart. But the hope that the group would then be able to get off to a successful start, freed from many legacy issues, was not fulfilled.
On the contrary: in early 2021 and early 2022, the shrunken retail giant had to ask for government support in view of the pandemic. Overall, the Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with 680 million euros.
Inflation in the euro area rises to a record 10.7 percent
Energy remains the main driver of inflation.
tsf. Inflation in the euro zone continues to climb rapidly. In October, inflation was 10.7 percent compared to the same month last year. A month ago, an inflation rate of 9.9 percent was measured.
As the statistics agency Eurostat announced on Monday, the energy sector is once again the most important driver of inflation. Here the rate of inflation rose from 40.7 percent in the previous month to 41.9 percent now. Energy is followed by food, alcohol and tobacco (13.1 percent; vs. 11.8 percent in September), non-energy industrial goods (6 percent; vs. 5.5 percent in September) and services (4.4 percent; vs 4.3 percent in September).
Core inflation, which does not take into account the prices of energy, food and luxury goods, which are particularly susceptible to fluctuations, rose from 4.8 to 5.0 percent.
Euro zone economy growing faster than expected
(dpa) The economy in the euro zone developed better than expected in the summer. In the third quarter, the gross domestic product (GDP) of the 19 euro countries grew by 0.2 percent compared to the previous quarter, as the statistics office Eurostat announced on Monday in Luxembourg based on an initial estimate. Analysts had expected a small increase in economic output of 0.1 percent for the months of July to September.
However, the economy lost momentum in the summer months. In the second quarter, gross domestic product increased by 0.8 percent. In the third quarter, the economy in the common currency area grew by 2.1 percent year-on-year, according to Eurostat.
Economic development in the individual countries continues to vary. While the major economies in the euro zone grew slightly, the economy in Latvia shrank significantly. The Baltic states are currently suffering from the consequences of the once close economic ties with Russia, which have become a strain in the wake of the Ukraine war and Western sanctions.
Several crises at the same time are burdening labor markets worldwide
(dpa) The job markets worldwide are under pressure with the crises caused by Corona, climate change, conflicts and the war against Ukraine. The initial recovery from the pandemic slowed down over the course of the year, the International Labor Organization (ILO) reported on Monday in Geneva. It assumes that in the third quarter 1.5 percent fewer hours were worked than in the same period before the pandemic. That corresponds to 40 million full-time jobs. The main reasons are disruptions in the labor market in China due to the zero-Covid policy there and the consequences of the Russian war against Ukraine.
The situation in Ukraine is dramatic. 10.4 percent of those employed in Ukraine before the war, a total of 1.6 million people, are now refugees in other countries. A good quarter of them (28 percent) have found work in the host countries. This has consequences for both Ukraine and the host countries: Because it is mainly women who are fleeing, many of whom work in the education, health and social sectors, there is now a shortage of staff in Ukraine. In host countries, the influx of so many Ukrainian women could “lead to political and labor market destabilization”.
In view of the deteriorating economic prospects worldwide, ILO head Gilbert Houngbo called for, among other things, a redistribution of chance profits from companies that benefit from the crisis and better social security for people and companies that get into difficulties. He campaigned for a UN plan that requires investments for climate-neutral economies that will create around 400 million new jobs by 2030.