Which branches still have a future now
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.
Already threatened with closure in June 2020. Department store chain Galeria Karstadt Kaufhof has been forced to close 62 of its 172 stores across Germany, according to echo24.de had reported. Now the next bankruptcy shock for all employees. And this time it might not only affect the Heilbronn store.
As announced by the company, more than 40 of the remaining 131 department stores are to be closed down. Vis-A-vis the Frankfurter Allgemeine Zeitung, company CEO Miguel Mullenbach had announced the drastic step. 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; instead, a clear cut towards economically viable structures is required."
Plans for Galeria Kaufhof after insolvency – Heilbronn location questionable
But what happens next? Which Kaufhof stores will have to close? Heilbronn site escapes final closure for a second time? What plans do those responsible around company boss Mullenbach have in the drawer. When asked by echo24.de, Galeria Karstadt Kaufhof GmbH explains its further course of action.
| Company: | Galeria Kaufhof |
| CEO: | Miguel Mullenbach |
| Foundation: | 1879, Stralsund |
| Founder: | Leonhard Tietz |
| Resolution: | 2020 |
The cornerstone for a realignment after the insolvency proceedings will be the already redesigned stores. It says: "The redesign of the first 10 or so Galeria stores as part of the newly implemented Galeria 2 strategy.0 since October 2022 shows demonstrable success and must therefore be continued after fine-tuning."But this also means that anyone who does not fit into the new concept will be closed down.
After insolvency: these Galeria Kaufhof stores will be closed down
Those responsible at Galeria are also making no secret of the consequences of the realignment: "In order to make this possible on the basis of the new economic conditions, the existing store portfolio will have to be significantly reduced and stores will have to be disposed of that can no longer be operated profitably due to these new conditions."
Unsuitable Kaufhof stores will be sorted out in order to be able to finance the renovation of the few remaining buildings. The announcement states that this will enable "further modernization measures for the sustainable core. But according to experts, the future looks bleak for the company. Even Aldi stores would therefore have more customers.
Galeria Kaufhof: Those responsible rely on insolvency for realignment
And Galeria Kaufhof has also once again commented to our editorial team on the renunciation of further state aid. According to the statement, in the course of the dialogue with the Economic Stabilization Fund (WSF) and the responsible 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 in order to facilitate corporate reorganization.
Such funds would "put too much of a financial burden on Galeria and limit its ability to continue the transformation process it has begun Galeria 2.0 to be able to continue its operations at an accelerated pace to the extent 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? Locations not yet named by the company
The responsible persons with Galeria Kaufhof see the department store chain quite future-capable. According to its own statement, "the business model with the necessary modernizations of the branches is viable and will be able to succeed in the market, free from undue burden".
Those responsible at Galeria Kaufhof are not yet saying which stores they would like to open in the future. Opposite echo24.The company simply states: "At this point in time, we are unable to make any statements about individual locations, which are now the subject of very careful case-by-case consideration 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. "Our colleagues have invested millions of euros over many years in Galeria Karstadt Kaufhof. There is great anger and disappointment among our colleagues in the field."