2023-11-29 19:31:35
What has already been circulating in the media for days has now been confirmed by Signa Holding: The Austrian conglomerate has applied to the commercial court in Vienna to open self-administered restructuring proceedings. The group of real estate and trading entrepreneur René Benko announced this on Wednesday.
Around 1,000 sub-companies belong to Signa Holding, which, it is said, got into trouble due to increased construction and energy costs in the wake of the Ukraine war; The company owns numerous commercial properties in Austria and Germany. The news of the Signa bankruptcy is causing great uncertainty – especially in Berlin.
All of the group’s construction projects were put on hold at the beginning of the month. What will happen next with planned projects such as the renovation of the Karstadt branch on Hermannplatz and the brake factory on Ostkreuz is currently unclear. The Austrian group also owns prestigious buildings such as the “Upper West” high-rise at Zoo Station – and the KaDeWe building.
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There are now widespread concerns in the city about the future of the traditional department store, which rents its approximately 60,000 square meters of sales space from the insolvent holding company. Michael Peterseim also knows this: The new CEO of the KaDeWe Group has only been in office for four weeks – and he already has to deal with prophecies of doom that predict an end to the luxury temple on Tauentzien. What does he answer to that? We asked Peterseim that on the phone.
Mr. Peterseim, does Berlin have to worry about KaDeWe? Current media reports suggest this.
The KaDeWe has been around for more than 100 years. And I would say that KaDeWe will still be around in the next 100 years. We are currently doing very well. The KaDeWe Group was separated from the Karstadt Group in 2014 with the new “Luxury Up” strategy, which has since been successfully implemented with high investments. And current figures show us that we are on the right track. Overall, the KaDeWe Group with its three department stores in Berlin, Hamburg and Munich will end this calendar year with sales of 800 million euros – twice as much as in 2014 and a double-digit percentage more than in times before the pandemic.
However, the current media reports refer less to the economic strength of KaDeWe than to the announcement of Signa’s insolvency. How exactly are the connections between your group and the Austrian holding company?
We have a majority shareholder, the Central Group from Thailand, and due to the majority of the shareholder shares, they also have the sole decision-making rights, operationally, strategically and financially. Central Group has always reiterated that it stands by us at every stage to fully support our business model. As a listed, long-established retailer, it operates leading global luxury retail companies with the best brand partners, the best product selection and exceptional customer experiences at all of its locations. Europe remains a key strategic market for the Central Group. Signa, on the other hand, is a minority shareholder without strategic and operational influence.
The KaDeWe Group
To person
Michael Peterseim
was born in 1969 and has been managing the management of the KaDeWe Group as CEO since November 1st, which, in addition to the Berlin headquarters, also includes the Oberpollinger in Munich and the Alsterhaus in Hamburg. Before his current position, he had worked for both department stores for around five years. He previously worked in similar positions for various companies, such as the fashion company Clinton Wholesales GmbH or the tourism group Thomas Cook.
But Signa is the owner of all of the German department store buildings in your group, from the KaDeWe in Berlin to the Alsterhaus in Hamburg to the Oberpollinger in Munich.
On the real estate side, we are tenants first. And it is actually the case that the rental companies that each own one of our buildings are located in the Signa network. But we have secured our locations with very long-term rental agreements. The three iconic locations Alsterhaus, Oberpollinger and Kadewe are part of our business model, which is not possible without these buildings. We have a very close connection to the buildings and we have secured these with rental agreements that run for more than 30 years.
And these contracts are not invalid if the landlord goes bankrupt?
In principle, Signa Holding is not involved in the rental agreements. In addition, rental agreements generally continue to run even during insolvency and are not affected by the insolvency during their term.
The Central Group had already bought 49.9 percent of the shares in the KaDeWe department store building from Signa in March. Now it makes sense that she will take over the entire construction. Would that be in your interest?
I’m not speculating. But even in this case, this would have no impact on our actions. We concentrate on our business, which is particularly important in the run-up to Christmas and is a lot of fun.
What does the Signa bankruptcy actually mean for the KaDeWe Group? Basically just that you now have to do damage control when it comes to the media response?
You see me very relaxed. A structured process is now running at Signa and we are observing this with great calm.
Bad mood? “Above all, I notice a wonderful Christmas atmosphere in KaDeWe,” says Peterseim.The KaDeWe Group
Nevertheless, the word “insolvency” in connection with KaDeWe is likely to stick not only in the media, but also among your customers and your workforce. What is the mood in the department store at the moment?
When I walk through our house these days, what I notice above all is a wonderful Christmas atmosphere. In conversations with customers and also with our employees, the joy of this great atmosphere can currently be felt.
A Business Insider article recently stated that your group pays a total annual rent of 65 million euros to Signa for all three department stores in Germany, of which 40 million was for the KaDeWe building alone.
We treat our rental agreements confidentially like all our other contracts. We have long-term rental agreements with the respective property companies. But of course it is our job as management – that is the nature of things – to constantly review contracts.
Are such rents actually linked to the profitability of a house? So are there episodes where you as a manager could go and say, “Things haven’t been going so well this year, can we talk about rent?”
As already mentioned, we always optimize contracts and therefore also rental agreements. In my role, of course, any rent seems too high to me and should always be negotiated.
And what about the store-in-store concepts on the ground floor of KaDeWe, where well-known brands operate their own small shops? Are they, in turn, tenants of your group or do labels like Dior or Prada also rent their ground floor space from Signa?
At all three locations, we are the sole tenant of the entire building, and all brands represented by us, regardless of their business model, have contracts with the KaDeWe Group. We have different business models, including “concession partners” such as Prada or Dior, as well as areas for which our own 30-person purchasing team purchases at trade fairs and fashion shows around the world in order to provide our customers with the best curated range of international and trendy niche brands to offer.
Mr. Peterseim, you have only held your new position as General Manager of the KaDeWe Group since November 1st and have to deal with insolvency issues less than four weeks after taking up your position. Would you have wanted your debut to be different?
We offer wonderful worlds of experience in all of our stores. I have been working for the group for more than five years, currently as second managing director, and during that time there have always been challenges that we have successfully overcome together. My stance is that standing still means going backwards and I look forward to everything that comes. I have the best job in the world.
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