1,400 jobs affected – Galeria confirms: 16 houses will close by the end of August

Berlin (Ringcenter, Spandau, Tempelhof), North Rhine-Westphalia (Essen, Köln Breite Straße, Wesel) and Bavaria (Augsburg, Regensburg Neupfarrplatz, Würzburg) are particularly hard hit by closures, with three stores each.

In addition, these department stores would have to close: Chemnitz, Leonberg, Mainz, Mannheim, Oldenburg, Potsdam, Trier Fleischstrasse.

1400 jobs affected
Of the approximately 12,800 people the company employs, 11,400 would have to keep their jobs. 1,400 people will have to leave, almost a third of whom are employees at the company’s headquarters in Essen. The company’s headquarters are moving to the Shadowstrasse branch in Düsseldorf. “We will do everything we can to lead our company into a successful future. We see good conditions for this, not least thanks to our turnover development in the current financial year,” says Galeria boss Olivier Van den Bossche.

According to the trade group, a weighing of interests and a social plan have been agreed with the general works council. It was determined, among other things, that all those affected could switch to a transfer company for eight months to orientate themselves on the labor market. “A few weeks ago there was still great fear about the scenario that Galeria would be liquidated. But now there is another opportunity for the department store,” says general works council chairman Jürgen Ettl. Nevertheless, the entire working population is severely affected.

“We negotiated hard to get every location”
When deciding on the future of the branches, the rent amount was the decisive factor for curator Denkhaus, in addition to the sales and purchasing power of the region in question. “We negotiated hard to keep every location,” Denkhaus said. Individual establishments on the closure list may still be able to hope for survival. During the previous bankruptcy procedure, which was lifted in May 2023, several department stores were removed from the list again. Because new agreements were made with the tenants at short notice, ultimately not 52 of the former 129 locations were closed, but only 37.

The German City Association sees the retention of 76 branches as good news for the municipalities and the employees of the stores. “We have the impression that this new start outside the Signa Group really marks the beginning of a time of sustainable concepts for the locations,” Managing Director Helmut Dedy told dpa. Yet it is “bitter news” for the locations that cannot be saved.

Signa insolvency responsible for difficult situation
Expert Johannes Berentzen from trade consultancy BBE was sceptical. The closure of the sixteen houses has not resolved the major challenges of the remaining houses and Galeria’s business model, he told dpa. It involves more local entrepreneurship, investments in space, in personnel and in connecting the online and offline world.

The department store group filed for bankruptcy in early January. It is the third bankruptcy within three and a half years. At the time, Galeria boss Olivier Van den Bossche cited the bankruptcies of the Signa Group of previous owner René Benko as the reason for the difficult situation. Their imbalance had immediate consequences: the financial resources for the restructuring of the department store chain, which had been promised in the aftermath of Benko’s previous bankruptcy, no longer arrived.

American investors take over department store chain
In January, van den Bossche and Denkhaus announced the search for a new owner and the preservation of Galeria as a goal. It has been known since the beginning of April that a consortium consisting of the American investment company NRDC and the company BB Kapital SA of entrepreneur Bernd Beetz wants to take over the department store chain.

It is still unclear which concept will be used to take the trading group forward again and to what extent the new owners will invest in the company. However, the agreement between investors and Galeria will only come into effect if creditors agree.

Positive image of Galeria’s future
Beetz emphasized that the agreement provides a better and more sustainable economic basis for the department store’s future. “We remain committed to making Galeria a highly attractive retailer again and look forward to the next steps in the process.”

Curator Denkhaus wants to present the bankruptcy plan for the transfer of ownership at the end of April. The plan will only be legally binding if the creditors’ meeting approves it on May 28 and is then reaffirmed by the court. Denkhaus wants to transfer the company to the new owners at the end of July.