Stefan Denkhaus, the liquidator of the last major German department store chain Galeria Karstadt Kaufhof, which was previously part of René Benko’s crumbling Signa empire, is lobbying creditors to accept the insolvency plan. He recommended voting in favor of the plan, he said Monday.
“The alternative would be to split the company,” Denkhaus warned. “As a department store with an anchor function, the group is also “of great importance for the future of city centers.” “I am convinced that Galeria has a good future with its management and investors,” Denkhaus emphasizes.
Expected bankruptcy rate of 2.5 to 3 percent
The creditors of the department store chain, for which the Essen court opened bankruptcy proceedings on April 1, 2024, will meet on Tuesday to vote on the bankruptcy plan. According to its own information, Denkhaus expects a bankruptcy rate of 2.5 to 3 percent. Creditors and suppliers must therefore be prepared for significant reductions in their claims.
Signa’s bankruptcy causes problems at Galeria
However, the number of bankruptcies could rise if Galeria receives payments from claims against companies owned by its former Austrian parent company Signa. Signa Holding, owned by Tyrolean investor René Benko, went bankrupt, causing Galeria’s problems.
16 of the 92 department stores will be closed
Galeria now goes to new owners. The department store chain is being taken over by the former CEO of cosmetics group Coty, Bernd Beetz, and Canadian retail entrepreneur Richard Baker. At the end of April, Galeria Karstadt Kaufhof announced it would close 16 of its 92 department stores and cut about 1,400 of the current 12,800 jobs.
Been bankrupt three times already
Fierce competition from online retail, home-made problems and frequent changes in strategy had accelerated the decline of the last major German department store group. For Galeria Karstadt Kaufhof, there were a total of three bankruptcies in just over three years. During the Corona crisis alone, the chain twice sought refuge under the protective umbrella. Galeria’s creditors include the German state, which helped with 680 million euros.
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.
