“It’s a huge mess”
KaDeWe Group is said to have been in trouble for years
February 15, 2024, 10:12 p.m
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At the end of January, the KaDeWe Group unexpectedly filed for bankruptcy. How could this happen? A report now shows: The luxury department stores have been piling up ever-increasing losses for years. SPD politician Markus Schreiber blames René Benko’s Signa empire.
The insolvent KaDeWe Group, which, in addition to the shopping center of the same name in Berlin, also includes the Alsterhaus in Hamburg and the Oberpollinger in Munich, has been making losses for many years, according to a report. According to “Spiegel”, the department stores that belong to the Austrian René Benko’s Signa Group are said to have posted a moderate loss of 8.5 million euros in the financial year that ended at the end of September 2015. In the following years, the debt is said to have continued to grow. In 2022, the group accumulated a loss of 72.7 million euros.
One reason for this is said to have been the rent payments to the Signa Group. Between 2014 and 2015, the short and long-term rental and leasing obligations of KaDeWe dealers for the houses amounted to around 2.8 billion euros, and by 2022 the sum had already risen to 3.4 billion.
“It’s a huge mess that Signa has driven the department stores into bankruptcy with excessive rents,” criticizes Hamburg SPD politician Markus Schreiber. The management warned several times in its balance sheets that the company was “over-indebted”. In the past 2022 financial year, the company recorded a deficit of 92.3 million euros that was not covered by equity, whereas seven years earlier it was 16.7 million euros. Help from the shareholder Signa, for example through loans, kept the luxury houses afloat for years.
Nevertheless, in 2020, the federal government, Berlin, Bavaria and Hamburg together guaranteed a loan of 90 million euros to the KaDeWe Group with 81 million euros, which was used to finance ongoing business activities. As the “Spiegel”, which claims to have relevant documents, reported, neither the Federal Ministry of Economics nor the states wanted to comment on the guarantees and referred to confidentiality. At least, it is now said, the company has already repaid around a third of the loan.