According to the newspaper “Wirtschaftswoche”, the group submitted a corresponding application to the Essen district court. A company spokesman confirmed the procedure after the report. The process is aimed at rehabilitation. The branch network must shrink significantly. Layoffs are inevitable.
In the protective shield insolvency proceedings, a court-appointed administrator takes over the supervision of the rescue mission. However, the company management retains control and is advised externally.
Galeria boss Miguel Müllenbach told the “Frankfurter Allgemeine Zeitung” that the branch network had to be “reduced by at least a third” as part of the protective shield procedure. Layoffs are unavoidable. With 17,000 employees, the group currently operates 131 department stores in 97 German cities.
According to “Wirtschaftswoche”, the two insolvency experts Frank Kebekus and Arndt Geiwitz, who were already involved in the first protective shield procedure at Galeria Karstadt Kaufhof in 2020, are to be deployed. At that time, many branches were closed and several thousand employees lost their jobs. The first insolvency proceedings left the department store chain at the end of September 2020 after the creditors approved the restructuring plan.
The group later – plagued by the corona crisis – received government aid worth millions. Most recently, the chain was then faced with high energy costs and consumers’ reluctance to consume.
In the debate about fresh state aid for the ailing department store giant, the North Rhine-Westphalian Minister of Economics, Mona Neubaur, recently got involved. She spoke out in favor of the Galeria owner Benko getting involved. “Yes, I think it’s Mr. Benko’s turn to also contribute capital,” said Neubaur a week ago in Düsseldorf.
According to insiders, the last major German department store group in crisis had previously submitted a new application for state aid. It was only in January that the German government supported the company with a further EUR 220 million, and in 2021 Galeria had agreed on a loan of EUR 460 million with the German federal government.
At the beginning of October, the department store giant unilaterally terminated the collective restructuring agreement concluded with the Verdi union. Galeria boss Miguel Müllenbach drew a dramatic picture in a letter to the employees at the time. “We will only be able to successfully continue on our path if we succeed in restructuring Galeria’s financing and injecting new, fresh capital into the company,” says the manager.
Source: Nachrichten
