Retail group - New beginning for Galeria: Court lifts insolvency proceedings
Germany's last major department store chain Galeria can make a fresh start. The Amtsgericht Essen announced that the insolvency proceedings would be terminated at the end of the month. As of the 1st of August, the former Galeria Karstadt Kaufhof (GKK) will continue under the new company name Galeria. Nine stores will still be closed in August, and there will be 83 locations by the 1st of September, a number that is expected to remain permanent.
The implementation of the insolvency plan was successful, according to the company, which employs around 12,000 people nationwide. As of the 1st of August, the US investment firm NRDC and a holding company of entrepreneur Bernd Beetz will be the new owners of the company.
Optimistic Outlook
Insolvency administrator Stefan Denkhaus expresses optimism about the future of the business. "We have managed to reduce costs significantly in many areas," says the lawyer. "Galeria as a medium-sized company now has a good economic starting position and begins with a liquidity of several billion in the nine-figure range in the future."
New governments usually receive a grace period of 100 days. "I would wish that for Galeria with the new owners as well," says Denkhaus. "Best of all, 300 days, to gradually implement the future concept."
New Owners Bernd Beetz says that thanks to the efforts of all parties involved, a basis has been created that shows the company a clear future perspective. "Now we will start a new corporate culture in partnership with management and the workforce."
Concepts should be implemented to make stores more attractive, performance more rewarding, and customer satisfaction higher. "With that, we will build a new, self-confident Galeria, whose 83 locations in city centers are an important and reliable anchor tenant and a frequency generator for neighboring specialty stores and gastronomes," says Beetz.
The department store chain recently sold its 70 travel agencies to the ADAC. The company will focus on its core competence as a department store, according to CEO Olivier Van den Bossche. "There will also be store modernizations to offer an attractive shopping atmosphere and an ideal shopping experience."
The department store chain is going through a crisis that also stems from the boom of online shopping and the resulting decline of shopping miles in city centers. In the 90s, there were several competing department store operators in Germany, then the market consolidation began: Kaufhof swallowed Horten and Karstadt took over Hertie. In 2009, Karstadt went bankrupt, and the situation remained tense. In 2018, the former rivals merged to become Galeria Karstadt Kaufhof. The contraction continued: There were 171 stores in 2020, and there will be fewer than half of that number going forward.
- The successful implementation of the insolvency plan has allowed Germany's last major department store chain, GALERIA Kaufhof, to transition from insolvency proceedings and operate under the new company name Galeria.
- Bernd Beetz, an entrepreneur from Germany, will be one of the new owners of Galeria, bringing in fresh investment through his holding company.
- Stefan Denkhaus, the insolvency administrator, expresses optimism about the future of the business, citing significant cost reductions and a strong economic starting position with a large liquidity reserve.
- In August, nine stores will still be closed, but the department store chain will continue with 83 locations, a number expected to remain permanent.
- The District Court in Essen announced the termination of insolvency proceedings for Galeria at the end of the month, marking a new beginning for the iconic department store chain.
- Karstadt, another major department store chain in Germany, has also gone through insolvency proceedings and is seeking a new beginning, similar to Galeria.
