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Friday, March 31, 2023

Retail: Galeria raises hopes of maintaining branches

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Germany’s last major department store chain has announced that it intends to close 52 of its 129 department stores. But maybe there is still hope for individual locations.

The department store group Galeria Karstadt Kaufhof does not rule out a rethinking of some of the 52 branches planned for closure – provided there are further concessions from landlords or municipalities. “Should there be any significant changes to the current prospects for the continuation of the branches, there may well be a reassessment,” said a company spokesman on Tuesday in Essen of the German Press Agency.

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Even in the first insolvency proceedings in 2020, the number of branches that were closed was still reduced due to such last-minute concessions. Apparently, the takeover of individual department store locations by other retailers is still in the offing. Galeria had already reported in January that several bidders had expressed interest in taking over businesses. Among them was the Dortmund fashion retail chain Aachener. A breakthrough has apparently not been achieved in the talks so far. “At this point in time, no agreement could be reached with a transferee,” said the company spokesman.

According to the plans of the department store group, the remaining 77 branches are all to be comprehensively modernized over the next three years. In the future, the group intends to focus its product range primarily on the areas of clothing, beauty care and home accessories. However, before the restart, the creditors’ meeting on March 27th in Essen must give the green light. If she rejects the insolvency plan, the company is threatened with immediate collapse.

At the end of October, Galeria had to seek rescue in protective shield insolvency proceedings for the second time in less than three years. At the time, CEO Miguel Müllenbach named the exploding energy prices and the slump in consumption in Germany as the reason for the threatening situation of the company. The General Works Council also blames management errors for this.

Source: Stern

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