In the first protective shield procedure in 2020, Galeria Karstadt Kaufhof had to close many branches, and thousands of employees also lost their jobs at the time. The insolvency administrator is already nipping in the bud the hope that things could be different this time.
The insolvency administrator of the ailing department store chain Galeria Karstadt Kaufhof, Arndt Geiwitz, has announced tough cuts. Only a hard core will remain of the now 131 department stores, Geiwitz told WDR. Which ones will be decided in three months at the latest.
Galeria filed for bankruptcy under self-administration on Monday. A protective shield procedure is aimed at restructuring. A court-appointed administrator takes over the supervision of the rescue, but the company management retains control and is advised externally.
Galeria managing director Miguel Müllenbach told the FAZ on Monday that the existing branch portfolio had to be "significantly" reduced. "In the branches that we are no longer running, there will be layoffs for operational reasons." Management will also be affected. "Unfortunately, this is unavoidable in order to save the larger part of the company in this situation." Due to the decline in the number of customers in the inner cities, many houses can no longer be operated profitably.
Insolvency expert Geiwitz was already involved in Galeria Karstadt Kaufhof’s first protective shield procedure in 2020. At that time, many branches were already closed and several thousand employees lost their jobs. At the end of September 2020, Galeria left the protective shield again after the creditors approved the restructuring plan. In February 2021 and in February this year, the department store group received state aid; the total was 680 million euros. The loans were quickly used up in view of the rise in energy prices and customers' reluctance to buy as a result of inflation.
