The department store chain Galeria Karstadt Kaufhof wants to come out of the crisis with a new concept. For this purpose, branches will be rebuilt and the brand identity will be standardized.
In the corona pandemic, Galeria Karstadt Kaufhof had to be saved with a government loan. Now the ailing department store chain wants to come out of the crisis with a new concept. Company boss Miguel Müllenbach announced in an interview that he would be investing 600 million euros in the modernization of his houses. “We will strategically reposition ourselves with our Galeria 2.0 concept at the end of October,” said Müllenbach.
The traditional names “Karstadt” and “Kaufhof” could then disappear from the shopping streets. “We want to be a company with one brand,” said Müllenbach when asked whether Karstadt and Kaufhof will appear as a single “Galeria” in the future. “That won’t be long either.” A new uniform name for the department store company, which was merged in 2019, goes well with the changes that will take place from autumn, according to the company boss. The webshop is already running under the name galeria.de.
Branches are being rebuilt
The new concept envisages three types of department stores, which the company calls Weltstadthaus, regional magnet and local forum. Up to 60 of the remaining 131 locations are to be completely rebuilt, the rest at least partially. The first pilot houses are already being converted in Frankfurt, Kassel and Kleve.
The plan is to use part of the sales area more for services from partners. For example, regional products are to be offered there, but counters for city services or parcel counters are also to be built. E-bike stations and charging stations for electric cars are also planned. A dedicated app should support appointment bookings and the like. “We want to become the networked heart of the city center – with concepts that are precisely tailored to the local location,” says Müllenbach.
From state aid to state aid
New ideas are urgently needed because the group recently saved itself from state aid to state aid: Last year, Galeria Karstadt Kaufhof had to go through a protective shield procedure and close 40 stores. In early 2021, the company then received a government loan of 460 million euros to survive the consequences of the lockdown. The group, which belongs to Signa Holding owned by investor René Benko, is currently negotiating a further government loan.
Because of the corona lockdown, the company lost a billion euros in sales by the end of September 2020 alone, according to Müllenbach. The second lockdown occurred in the middle of the Christmas season. And still less is being sold than before Corona.
In view of the overwhelming power of Amazon in online retail, Müllenbach still sees the future of the department store group mainly in local stationary stores. Of the medium-term investments announced, 400 million are planned for the renovation of the houses. 100 million should flow into e-commerce and as much again into logistics and IT for stationary business.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
