Galeria Karstadt Kaufhof still has 92 branches. According to an industry expert, most will probably have to close, even if there is now a new investor.
Retail expert Jörg Funder does not expect that the new owners of the Galeria Karstadt Kaufhof department store chain will continue to operate a large part of the 92 branches in the medium term. “I consider 20 branches to be a realistic number. Anything beyond that is a concession to the insolvency administrator so that you can get the contract and continue to operate the stores for a certain period of time,” said the professor of corporate management in retail at the University of Worms.
After a transition period, it can be assumed that the investors will close more branches and only continue to operate the really profitable locations, said Funder. From his point of view, the closures could particularly affect smaller cities. “Why should you run a department store in a medium-sized city with 100,000 or fewer residents? I think it’s becoming increasingly difficult.”
Galeria insolvency administrator Stefan Denkhaus is aiming to take over at least 60 branches. Today he would like to introduce the new investor at the company headquarters in Essen. It was already announced yesterday that a consortium made up of the US investment company NRDC and the German entrepreneur Bernd Beetz wanted to take over Galeria.
Funder: “Not covered in fame”
NRDC is owned by entrepreneur Richard Baker, who also owns the majority of the Canadian department store company Hudson’s Bay Company (HBC). He was already the owner of Kaufhof through HBC between 2015 and 2019. According to information from the “Süddeutsche Zeitung”, the consortium wants to keep a good 70 of the 92 branches.
Funder does not expect that the new owners will be able to lead the department store company back to success. “We don’t know anything about their concept yet, but it seems to me to be more of a soldier of fortune act. HBC didn’t cover itself with fame back then and failed by simply taking over brands from abroad.”
According to Funder, Galeria needs a renovation of the branches and a new concept. A central department store model with 50 to 60 locations is difficult to implement. “This requires more staff, more service, more brands and more experience. That doesn’t happen by hand. You have to invest a lot of money. But I’m not sure whether the new owners want that.”
Source: Stern
