Germany’s beleaguered Galeria department store group can try to start afresh in August, as a district court announced on Monday that the group’s insolvency proceedings have been lifted.
Beginning Thursday, the company, formerly known as Galeria Karstadt Kaufhof, will be renamed Galeria, the court said. Nine branches will be closed in August, leaving the company with 83 locations nationwide, the court said.
The US investment company NRDC and a holding company owned by entrepreneur Bernd Beetz will become the new owners of the group as of Thursday, the company said. The retailer has around 12,000 employees.
Insolvency administrator Stefan Denkhaus was optimistic about the future of the company, saying it has been possible to reduce costs to a reasonable level in many areas.
“As a medium-sized company, Galeria now has a good economic starting position and is starting the future with available liquidity in the nine-digit range.”
Denkhaus said he would like observers to give the new firm a grace period of at least 100 days, as is common in politics, but “ideally 300 days to implement the future concept step by step.”
The department store group recently sold its 70 travel agencies to the German auto club ADAC to concentrate on its core department store competence.
Company boss Olivier Van den Bossche said stores will be modernized “to offer an attractive shopping atmosphere and an ideal shopping experience.”
The department store group is going through a crisis, which is also due to the boom in online retail and the associated decline of shopping streets in city centres.
In the 1990s, there were still several competing department store operators in Germany, then market concentration began: Kaufhof swallowed Horten and Karstadt took over Hertie. Karstadt went bankrupt in 2009, and the situation remained tense even after that.
In 2018, the former rivals merged to form Galeria Karstadt Kaufhof. The shrinkage continued: While there were still 171 shops in 2020, there are now fewer than half of them.
