Galeria Karstadt Kaufhof closes 52 department stores - 5000 jobs at risk

According to the general works council, the last major department store chain in Germany, Galeria Karstadt Kaufhof, wants to close numerous branches. The general works council of Galeria Karstadt Kaufhof GmbH announced on Monday that 52 of the 129 department stores with around 17,400 employees are to close their doors. More than 5,000 people are threatened with dismissal, it said. Galeria Karstadt Kaufhof was initially unable to comment. The company's board of directors was supposed to meet in the afternoon.

The background: Galeria Karstadt Kaufhof had to seek rescue in protective shield insolvency proceedings for the second time in less than three years at the end of October. In a letter to employees at the time, CEO Miguel Müllenbach cited the exploding energy prices and the slump in consumption in Germany as the reason for the company's threatening situation. From the start, the manager left no doubt that the renewed restructuring would involve significant cuts in the branch network and significant job cuts.

The department store chain has been sliding from one crisis to the next for years. Most recently, the official requirements in the Corona crisis had put a strain on business, the group resorted to state aid, then the branches suffered from consumer reluctance after the Russian attack on Ukraine. At the beginning of February, the district court in Essen opened insolvency proceedings against Galeria Karstadt Kaufhof.

In addition, the group, which belongs to the multi-billion dollar Signa Holding of the Austrian investor René Benko, who had merged Karstadt and Kaufhof, was plagued by home-made problems. Two years ago, Galeria Karstadt Kaufhof had already closed a good 40 of the 172 branches at the time during the insolvency proceedings, with around 5,000 employees losing their jobs.

The Galeria general representative Arndt Geiwitz, who had already accompanied the first protective shield procedure as a restructuring expert, was recently confident that thanks to the second protective shield procedure there was still a perspective for the department store group. "I am convinced that the Galeria department stores have a future, even if not in their current form," emphasized the renovator in an interview. However, the retail giant would have to become smaller and more decentralized for this.

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