The bankrupt German department store chain Galeria Karstadt Kaufhof was still able to break away from the hustle and bustle of Signa. A consortium consisting of the American investment company NRDC Equity Partners of Richard Baker and the German entrepreneur Bernd Beetz wants to take over the bankrupt department store chain Galeria Karstadt Kaufhof from René Benko.
In January 2024, Galeria filed for bankruptcy again; it was the third bankruptcy within three and a half years. At the beginning of April, the responsible court in Essen opened the procedure.
No official confirmation yet
Now the ailing company could at least partially survive thanks to the American takeover. There has been no official confirmation, but several German media reported on the interest of the American consortium.
Curator Stefan Denkhaus had recently completed negotiations with two bidders on the sale of Galeria. According to ‘Handelsblatt’, he informed the creditors’ committee on Monday that NRDC and Beetz should be awarded the contract. The contracts will be signed on Tuesday. Denkhaus wants to publicly present the buyer on Wednesday.
Final decision for creditors
The curator wants to present a bankruptcy plan at the end of April. This must be investigated by the judge. The final decision on a takeover by a new owner is made by the meeting of creditors. This will meet on May 28 at Messe Essen to vote on the insolvency plan. If the creditors’ meeting accepts this, it must be reconfirmed by the insolvency court. The judge can then cancel the insolvency proceedings.
“We fight for every sector”
The German department store chain currently operates 92 locations. It is still unclear how many there will be in the future. According to Denkhaus, this involves the takeover of at least sixty branches. If there were 60 locations left after the sale, about one in three would close. Many of the 12,800 employees therefore have to fear for their jobs. “We really fight for every industry,” Denkhaus said recently.
American investor has already been the owner at some point
The company NRDC is owned by the American entrepreneur Baker. The 58-year-old has a majority stake in the Hudson Bay Company (HBC) and Saks Fifth Avenue chains, which operate numerous department stores in the US and Canada. Baker already owned Galeria Kaufhof. HBC, which claims to be North America’s oldest company, acquired the German department store subsidiary of the Metro retail group in 2015. It was the first step into the European market for department store chain Baker’s.
First bankruptcy shortly after the merger with Signa
The merger with Signa followed at the end of 2018, HBC became minority owner of the new holding company, Signa initially acquired 50.01 percent of the merged company and then all shares in 2019. However, the following year the new department store giant Galeria Karstadt Kaufhof, which had more than 240 locations across Europe with approximately 32,000 employees, went bankrupt for the first time.
The number of remaining Galeria locations depends on how discussions with landlords proceed, which Denkhaus wants to complete in the coming weeks. The curator wants to reduce the rents for the homes and, depending on the sector, is aiming for a sales rent of 7 to 11 percent, or slightly more if business is going well. However, in Signa-owned locations, rents are often significantly higher and can reach 30 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
