Retail experts do not believe in Galeria's future
Following the insolvency of Signa-Holding, retail experts believe that the department store chain Galeria Karstadt Kaufhof has little chance of survival. Retail expert Gerrit Heinemann from the Niederrhein University of Applied Sciences, for example, cannot imagine that an investor would be interested in taking over the group. "The prospects are bleak. From a business point of view, it makes no sense," Heinemann told the German Press Agency.
Johannes Berentzen, head of retail consultancy BBE, also expects the search for an investor to be difficult. "When interest rates were low, entering the German market might have been interesting for international investors or even retail groups. In today's market and interest rate situation, there is hardly any chance of finding a buyer."
However, both experts can imagine that the Thai retail company Central Group could at least take over individual Galeria locations in major cities. The group already owns luxury department stores, including the KaDeWe in Berlin, the Alsterhaus in Hamburg and the Oberpollinger in Munich.
Signa Holding GmbH, owned by Austrian billionaire René Benko, announced insolvency proceedings on Wednesday. According to the holding company, it applied to the Vienna Commercial Court for the opening of restructuring proceedings under self-administration.
The Swiss subsidiary Signa Retail Selection AG, which also includes Galeria, applied to the court for creditor protection on Wednesday. The aim is to separate the company and liquidate it in an orderly manner, the company quoted its Chairman of the Board of Directors Christian Wenger. The business is to be wound up in an orderly and transparent manner, independently of the insolvencies of the rest of the Signa Group. The Board of Directors expects to be able to settle all external liabilities and to sell the parts of the company in a well-organized and structured manner in the coming months.
Despite the challenges in the retail sector, some real estate investors might see potential in transforming certain Galeria locations into other commercial spaces. For instance, a shift towards office spaces or residential units in prime city areas could be an option in the construction sector.
Moreover, the construction industry might also find opportunities in revitalizing and modernizing Galeria properties to attract alternative tenants or to reposition the locations as mixed-use developments.
Source: www.dpa.com
