2024-04-11 04:42:26
The ailing department store chain Galeria Karstadt Kaufhof is going into new hands. A German entrepreneur is also among the investors.
The insolvent department store chain Galeria Karstadt Kaufhof is going to a consortium led by investors Richard Baker and Bernd Beetz. Galeria insolvency administrator Stefan Denkhaus announced on Wednesday in Essen that the investors had won the contract for the department store giant. Read more about the US investor here.
“We are happy that our plan has been unanimously accepted and supported. We believe in the future of Galeria and have only one focus: the department store,” explained Beetz.
The 73-year-old further emphasized: “We want to invest, develop and grow in the long term.” The next few weeks are crucial to create the conditions for a solid business model. If these requirements are met, “we can put Galeria on a successful course,” says Beetz.
Galeria still operates 92 branches with 12,800 employees. The new owners of the insolvent department store chain Galeria Karstadt Kaufhof probably want to continue operating more than 70 of the 92 branches. This number is therefore part of the investor agreement, which was notarized on Tuesday.
Third bankruptcy in a few years
However, the signed takeover agreement will only come into force if the Essen District Court and the creditors’ meeting approve the insolvency plan drawn up by Denkhaus. If they don’t do that, the sale won’t happen. Denkhaus wants to present the insolvency plan by the end of April. The creditors will meet on May 28th at the Essen Messe to vote on him.
The insolvency proceedings were opened last week. Galeria filed for bankruptcy at the beginning of January. It is the third bankruptcy within three and a half years. The group, which previously belonged to the Austrian René Benko’s Signa Group, employs around 12,800 people.
The takeover is also accompanied by a streamlining of the headquarters in Essen. 450 jobs there, or half of the jobs, are to be lost. It is also unclear whether the headquarters will remain in the Ruhr city in the long term. The building is not in good condition and the rental agreement expires next year, Denkhaus explained. However, there is currently no agreement for a property in another city.
Elsewhere the development is also unclear: According to Galeria, the agreement stipulates that the investors will receive “Galeria as a whole” and “will probably take over more than 70 branches across Germany”. Since many rental agreements are still being negotiated, “the decision on the number of branches to be taken over will not be made until the end of April.”
Verdi welcomes takeover: “Expect the owner to invest”
In the coming days we will discuss a social plan with the general works council. Accordingly, a transfer company should be initiated and organized in a socially responsible manner. Verdi board member Silke Zimmer welcomed the decision for an “obviously financially strong investor”. “We therefore expect that the new owner will invest in the company, maintain the locations and secure long-term jobs for the employees.”
The general manager of the German Association of Cities, Helmut Dedy, welcomed the decision. “Many cities with Galeria locations will breathe a sigh of relief today,” he explained on Wednesday. With the separation from the Signa Group, these companies would have a real chance of a fresh start. At the same time, there must be “new concepts quickly” for the locations affected by closures. Cities could not afford to have vacancies.
Galeria managing director van den Bossche said that the company wanted to achieve relief by filing for bankruptcy. This has now been achieved to some extent through the takeover of the consortium. “Together with our future owner, we can continue on our already successful path after the proceedings have been lifted,” he said in Essen.
It was agreed not to disclose the purchase price. In a sense, the new owners are also the old ones: NRDC belongs to the entrepreneur Richard Baker, who also owns the majority of the Canadian department store chain Hudson’s Bay Company (HBC). HBC owned Galeria Kaufhof from 2015 to 2019, when the chain was merged with Karstadt. Beetz, president of the third division soccer team SV Waldhof Mannheim, was chairman of the Kaufhof supervisory board from 2018 to 2019.
The chain faces fierce competition from online retailers from Amazon to Zalando as well as international textile chains.