It is the second insolvency procedure for Galeria Kaufhof within two years. Now the company has talked about its plans and explained what conditions a store will need in the future.
As early as June 2020, the threat of. The department store chainGaleria Karstadt Kaufhof had to close 62 of the 172 stores across Germany, as echo24.de had reported. Now the next bankruptcy shock for all employees. And this time it might not just hit the Heilbronn store.
As announced by the company, they plan to close more than 40 of the remaining 131 department stores. Speaking to the Frankfurter Allgemeine Zeitung, company CEO Miguel Mullenbach had announced the drastic move. In view of the consumer slump and rising energy prices, there is no longer any alternative to insolvency. Mullenbach: "Permanent state loans cannot be the solution here, but a clear cut towards economically viable structures is required."
Plans for Galeria Kaufhof after insolvency – Heilbronn location questionable
But how does it continue? Which Kaufhof stores will have to close? If the Heilbronn location escapes a final closure once again? What plans do those responsible around company boss Mullenbach have in the drawer?. At the request of echo24.Galeria Karstadt Kaufhof GmbH explains its further course of action in this report.
| company: | Galeria Kaufhof |
| CEO: | Miguel Mullenbach |
| Incorporation: | 1879, Stralsund |
| Founders: | Leonhard Tietz |
| Resolution: | 2020 |
The cornerstone for a reorientation after the insolvency proceedings is to be the already redesigned stores. It said: "The redesign of the first 10 or so Galeria stores as part of the newly implemented strategy Galeria 2.0 since October 2022 shows proven success and must therefore be continued after fine-tuning." But also means that those who do not fit into the new concept will be closed down.
After insolvency: these Galeria Kaufhof stores will be closed down
Galeria officials also make no secret about the consequences of the realignment: "To make this possible based on the new economic conditions, the existing store portfolio will have to be significantly reduced and it will be necessary to divest stores that are now no longer profitable to operate due to these new conditions."
Unsuitable Kaufhof stores are being sorted out in order to be able to finance the renovation of the few remaining stores. The announcement says it will be used to enable "the further modernization measures for the sustainable core.
Galeria Kaufhof: Those responsible are counting on insolvency for realignment
And Galeria Kaufhof has also commented again to our editorial staff on the waiver of further state aid. According to the statement, in the course of the dialogue with the Economic Stabilization Fund (WSF) and the relevant federal ministries, a conscious decision was made against "additional interest-bearing borrowed funds".
Protective shield proceedings
By definition, protective shield proceedings are a special type of proceedings under German insolvency law. It combines provisional self-administration with the aim of submitting an insolvency plan at an early stage, thereby making it easier to restructure companies.
Such funds would "place too great a financial burden on Galeria and would limit the possibility of accelerating the transformation process Galeria 2.0 transformation process that has begun to the extent that is absolutely necessary.". In a protective shield procedure, it would be possible for Kaufhof to present the short-term optimization of the store portfolio well and "the financial resources can be invested in a targeted manner in the modernization process".
Where does Galeria Kaufhof go from here? The company has not yet named any sites
Those responsible at Galeria Kaufhof see the department store chain as quite viable for the future. According to the company's own statement, "the business model with the necessary modernizations of the stores is viable and will be able to succeed in the market, free of unlevered burdens".
Those responsible at Galeria Kaufhof are currently keeping quiet about which stores they want to go into the future with. Versus echo24.de, the company simply states: "We are unable to make any statements at this time about individual locations, which are now the subject of a very careful case-by-case review and analysis."
Trade union verdi criticizes procedure at Galeria Kaufhof
The Vereinte Dienstleistungsgewerkschaft (verdi) criticizes the procedure at Galeria Kaufhof. In an official statement, the union says: "Galeria boss Miguel Mullenbach has threatened to close at least 40 of the department stores still operating in 97 German cities. This leads to an acute endangerment of the still more than 17.000 jobs in the company."
And it goes on to say: "Our colleagues in the 131 department stores are asking themselves where, in this existentially highly threatening situation for 17.400 people and their families is the owner," explained ver.di national board member Stefanie Nutzenberger. "For years, our colleagues have invested millions of euros in Galeria Karstadt Kaufhof. The anger and disappointment of our colleagues on site is great."