New bankruptcy case: what awaits Galeria?


Status: 2022-11-04 08:12

The department store group Galeria Karstadt Kaufhof is in default again. How many jobs are the houses at risk – and what happened to the houses that were due to close in 2020? Answers to some questions.

Meike Fries,

What is the state of affairs?

Galeria Karstadt Kaufhof for the second time since 2020 Self-initiated bankruptcy case – the purpose of the procedure is rehabilitation. The fact that branches are closed and jobs are eliminated is not up for debate. The question is how much will be cut this time and, of course, whether the restructuring can be successful.

How was 2020? bankruptcy proceedings?

in 2020 in April, at the height of the Corona quarantine, the group had already applied for independent insolvency. The company was forgiven debts of two billion euros. The process continued until the end of September of the year, when “Galeria” again left the protective shield after the creditors approved the restructuring plan. Ultimately, 41 branches were closed and around 4,000 jobs were lost. In the end, fewer houses had to be closed than originally thought – 50 instead of 62. Among other things, the house on Frankfurt’s Zeil could continue to operate, as well as four houses in Berlin alone.

How has the business been developing recently?

In the last financial year 2020/21, the group made a loss of €622 million on sales of €2.1 billion. Sales from the net retail business were “well below expectations” at $1.85 billion. euros. Last year it reached 2.98 billion. euros. For the 2021-2022 financial year, which ended at the end of September, management expects an “annual deficit in the low to mid-triple-digit million range.”

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What state funds have already flown?

The group applied for help in 2021 and again this year. A total of 680 million euros have been disbursed from the Economic Stabilization Fund (WSF), which was established by the federal government after the corona pandemic. Before starting the current shield procedure, the group negotiated with the federal government for further financial assistance, which should go beyond the $680 million already paid, but this was unsuccessful.

How many branches are there? How much could close now?

After 2020 bankruptcy proceedings, there are still 131 branches in 97 German cities with a total of around 17,400 employees…

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