Galeria Karstadt Kaufhof is facing bankruptcy again

Europe’s second largest department store chain, Galeria Karstadt Kaufhof, is threatened with bankruptcy again. The bankruptcy filing could take place as early as tomorrow, Tuesday, reported the Frankfurter Allgemeine Zeitung, the Süddeutsche Zeitung and the Neue Zürcher Zeitung.

It would be the German department store chain’s third bankruptcy within three years. The reason is probably a lack of financing for Signa’s parent company after the holding company went bankrupt in November. According to an insider, preliminary discussions are underway with creditors. Galeria did not comment.

The bankruptcy would affect 12,500 employees and 110 department stores. According to the FAZ, during the most recent restructuring, Signa Holding committed to paying a net amount of 200 million euros to Galeria. Half of this is landlord subsidies for Signa buildings, but the first payment tranche of 50 million euros should have come in February. However, following Signa Holding’s bankruptcy in November, it is unlikely that this money will be paid out. Liquidity could also be burdened because, according to Galeria’s supervisory board, this should not fall to less than 90 million euros.

According to the FAZ, it is unlikely that there will be another restructuring with self-administration. Potential buyers are already being sought in the background, such as the Thai Central Group, which holds the operational majority in the KaDeWe Group.

In the two previous Galeria renovations (2020 and 2022), the creditors had to accept tough cuts and forego several billion euros in claims. In addition, 680 million euros in tax money flowed to Galeria during this period.

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