New owners: Galeria: What the modernization may cost

New owners: Galeria: What the modernization may cost

Numerous branches of the ailing department store chain are to be modernized. Now the new owners are revealing how much money they want to invest in the company.

The new owners of Galeria Karstadt Kaufhof want to invest up to 100 million euros over the next two to three years to modernize the remaining department store branches. The German Press Agency learned this from those close to the owners. The “Spiegel” first reported about it.

As part of the insolvency proceedings, 16 of the 92 Galeria branches are scheduled to close at the end of August. It has been known since the beginning of April that a consortium made up of the US investment company NRDC and the entrepreneur Bernd Beetz’s investment company BB Kapital SA wants to take over Galeria. So far they have not commented on how much money they want to invest in the department store company.

The previous Galeria owner, the Austrian entrepreneur René Benko, pledged 200 million euros for the renovation of Galeria last year, half of it as a loan. However, apart from one million euros in share capital, nothing was flowed due to the difficulties of Benko’s Signa Group. As a result, Galeria got into difficulties and filed for bankruptcy at the beginning of January. It is the third bankruptcy within three and a half years.

Retail expert Carsten Kortum sees a significant investment backlog at Galeria. Only ten department stores have been modernized so far. For the remaining 66, the investment requirement is an average of 20 million euros per branch, estimates the professor at the Baden-Württemberg Cooperative State University in Heilbronn. Overall, investments of more than one billion euros are necessary.

The takeover by NRDC and Beetz will only take place if the creditors accept the insolvency plan on May 28th and it is then reconfirmed by the court. Denkhaus wants to hand over the company to the new owners by the end of July.

Source: Stern

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