The court in Essen, Germany, has opened insolvency proceedings for the last major German department store chain Galeria. The court gave the green light to the self-management process on Wednesday, after the restructuring plan was filed with the court on time, the company said. The department store giant’s owner is Austrian investor René Benko’s multibillion-dollar Signa Holding.
The management with the German general representative Arndt Gproteinz can now continue with the restructuring of the Galeria company, Frank Kebekus has been confirmed as administrator for the department store chain. The restructuring concept envisages a repositioning of Galeria with a product offering that is more closely aligned with local needs.
This also includes the integration of mobile, online and branch purchases. It is still unclear what the branch network will look like in the future – talks with the landlords are continuing. Gproteinz originally announced last year that it would probably become clear in the course of January which of the 131 department stores would have to close.
Urgent U-turn required
“Focus, prioritization, efficiency and speed are the clear guidelines that management must now consistently implement,” said Gproteinz on Wednesday. If successful, Galeria will have “a positive future in Germany”. Administrator Kebekus also sees “a very good chance that the meeting of creditors, which is expected to take place at the end of March, will also approve the plan”.
After the opening of the procedure, Galeria now has to pay the wages and salaries of the employees itself again; the bankruptcy money has been paid through the German Federal Employment Agency (BA) for the past three months.
Company received state aid
German Economics Minister Robert Habeck said in Berlin that he would not comment specifically on the insolvency proceedings. The German government supported the company twice during the Corona period – because of the special importance of the branches for the inner cities. “Nevertheless, there are structural issues that could not be resolved during this support period,” he added.
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