CAPTION: Galeria Kaufhof store at Berlin Alexanderplatz (pa/dpa)
Troubled German department store group, Galeria Karstadt Kaufhof, said on Monday it is again seeking protective bankruptcy proceedings in a bid to survive. The retail giant - which currently operates 131 department stores in 97 German cities - now faces fresh branch closures, Galeria boss Miguel Müllenbach said.
Müllenbach told the daily Frankfurter Allgemeine Zeitung that at least a third of the remaining branches would have to be shut down and lay-offs would be unavoidable. Galeria Karstadt Kaufhof currently has 17,000 employees. The country's last surviving major nationwide department store chain, Galeria Karstadt Kaufhof has been hit hard by the coronavirus pandemic.
In 2020 the concern completed bankruptcy proceedings for the first time in a bid to enable it start over. More than 40 branches were closed at the time, some 4,000 jobs were cut and more than €2 billion ($1.98 billion) in debt was cancelled in the hope that the chain would take off again.
This did not happen: On the contrary, in early 2021 and early 2022, the shrunken retail giant had to ask for government support in view of the pandemic. Overall, the Economic Stabilization Fund (WSF) helped out with a total of €680 million.
In a recent letter to employees, Müllenbach warned that Galeria was "in a dangerous situation" due to skyrocketing energy prices and sluggish consumption. The group needs fresh money to continue. However, further state aid is controversial. Critics consider the department store's business model outdated and say the group's billionaire Austrian owner René Benko ought ought to take a more active role.
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