Galeria Karstadt Kaufhof (GKK), the renowned German department store chain, has officially filed for insolvency at the Essen District Court. The company is actively pursuing a new owner, engaging in discussions with potential investors to ensure the continuity of Galeria’s operations.
CEO Olivier van den Bossche highlighted the liberating aspect of the event, attributing operational constraints to the former ownership structure’s general conditions. He stated, «Signa Group’s bankruptcies have significantly impacted Galeria, hindering ongoing activities and limiting future development possibilities due to high rents and costly services.»
This marks GKK’s third bankruptcy filing in less than four years, stemming from challenges faced by parent company Signa. Recent bankruptcies within Signa’s commercial and real estate group, including Signa Retail Selection AG, to which GKK belongs, have led to the announcement of an orderly liquidation.
Previous refuge-seeking measures in late 2022 and an approved insolvency plan in March 2023, backed by Signa’s 200 million euros restructuring commitment, did not provide a sustainable solution. Concerns for over 15,000 jobs arise, given the closure of approximately 40 branches in the previous bankruptcy. The impact on remaining 18 stores and the employees remains uncertain.
GKK’s decision for a regular insolvency procedure involves attorney Stefan Denkhaus as the provisional judicial administrator. While the management remains, all operations require approval, emphasizing the need for a thorough assessment of insolvency grounds and procedure costs.
The history of creditor forgiveness and German government financial aid underscores the challenges faced by Galeria. As GKK navigates this insolvency, the focus shifts to finding a new owner and securing the future of this iconic department store chain.