Still selling in April?
Insolvency proceedings opened for Galeria Karstadt Kaufhof
April 2, 2024, 9:45 a.m
Galeria Karstadt Kaufhof filed for insolvency three times within three years. Many of the currently 92 branches are on the brink. Now the process begins and creditors can register their claims.
The Essen district court has opened insolvency proceedings for the ailing department store group Galeria Karstadt Kaufhof. This emerges from an announcement by the court on the portal insolvenznachrichten.de. Accordingly, the proceedings were opened on April 1st.
With the opening of the proceedings, the creditors can register their claims against Galeria Karstadt Kaufhof. The department store chain currently has 92 branches and, according to its own information, employs around 12,800 people.
The company filed for insolvency at the Essen district court at the beginning of January. It is the third bankruptcy within three and a half years. Insolvency administrator Stefan Denkhaus announced a few weeks ago that there were several interested parties for the department store chain and that “we will now finally negotiate a purchase with two of them.” This was agreed upon with the creditors’ committee. Denkhaus wants to complete the sale in April.
Rents should be reduced
“Both interested parties have extensive experience in German retail and also have the funds required for the upcoming investment,” said Denkhaus. He did not want to name the possible investors. According to him, these are companies with a German background and international financing partners. The offers showed “that the department store is alive and has a future,” said Denkhaus. He expects that “a branch network of 60 plus X branches” can be maintained.
The number of remaining Galeria locations depends primarily on the ongoing negotiations with the landlords. The insolvency administrator’s goal is to reduce rents. Depending on the branch, he aims for a sales rent of seven to eleven percent, or a little more if business is doing particularly well. “It makes no sense to continue operating a branch with a rent burden of more than 30 percent.”
In the branches that are located in properties owned by Signa, the rents are often significantly higher. According to its own information, the company pays up to 30 percent of sales there. Denkhaus had already announced in January that it would close branches if there was no accommodation from the landlord.