Clear cut at Galeria Karstadt Kaufhof!
Germany’s last large department store group, Galeria Karstadt Kaufhof, wants to close 52 of the remaining 129 department stores.
After a supervisory board meeting in Essen, the group announced that the houses would be closed in two waves at the end of June this year and at the end of January next year. A total of 4,300 employees are affected, 4,000 of them in the individual branches. You should receive the offer to switch to a transfer company in order to further qualify for a new job.
︎ Accordingly, 77 locations can remain in place, which corresponds to around 11,000 jobs. For 52 branches, however, there is “no positive continuation perspective in view of the general economic conditions, the local conditions and also after intensive negotiations with landlords and cities”.
In plain language this means: Thousands of employees will lose their jobs, numerous inner cities will lose an important attraction in their shopping streets.
According to the General Works Council, “well over 5,000 employees will lose their jobs” in the course of the insolvency proceedings. Not only would jobs in the closing branches be lost. Area reductions and staff cuts in the remaining houses and in the central functions are also planned.
▶︎ A spokeswoman for Robert Habeck’s (53, Greens) Ministry of Economic Affairs told BILD: “This is serious news that the general works council announced today. It is now up to the social partners to act responsibly.”
The last large department store chain in Germany with around 17,400 employees has been sliding from one crisis to the next for years. Galeria went into a so-called protective shield insolvency procedure in the fall, which is aimed at restructuring. The company announced that the restructuring plan is now in place.
BILD reporter experiences business closure
For many Karstadt employees, the message apparently came without any warning! As Saxony’s Verdi press spokesman Jörg Förster explained to BILD, he received a call from a Galeria employee from Leipzig on Monday: According to the employee, the doors were locked after the department store opened and all employees were called to the works meeting – there the people were informed without warning closure with.
The Galeria Kaufhof in Leipzig remained closed on Monday
► A similar picture in Berlin: About 15 minutes before the closure hammer was published, the branch at Leopoldplatz was cleared and closed – according to the announcement due to a technical defect.
A BILD reporter happened to be there when, at around 1:50 p.m., an announcement irritated customers: “The branch will be closed immediately. Please exit the store immediately. Due to a technical defect we have to close immediately.”
The few customers then went to the exit, where a security employee locked the doors with an iron bar so that no other customers could enter the shop.
These branches should be closed
The closure of the houses takes place in two stages. 21 branches are to be closed by June 30, 2023. 31 branches by January 31, 2024. “It is undoubtedly a difficult day for all of us today,” said Galeria General Representative Arndt Geiwitz on Monday when the list of closures was published.
► Accordingly, the following will be closed until June 30, 2023: Celle, Coburg, Cottbus, Duisburg, Erlangen, Gelsenkirchen, Hagen, Hamburg-Wandsbek, Hamburg-Harburg, Leipzig Neumarkt, Leverkusen, Munich train station, Neuss, Nuremberg, Nuremberg-Langwasser, Offenbach, Paderborn, Regensburg Neupfarrpfalz, Saarbrücken, Siegen, Wiesbaden .
Galeria Kaufhof on Leipzig’s Neumarkt is scheduled to close at the end of June
► Closed until January 31st, 2024: Bayreuth, Berlin-Charlottenburg, Berlin-Müllerstraße, Bielefeld, Braunschweig, Bremen, Darmstadt, Dortmund, Düsseldorf Schadowstraße, Essen, Esslingen, Frankfurt Zeil, Hanau, Heidelberg Bismarckplatz, Hildesheim, Kempten, Krefeld, Leonberg, Limburg, Lübeck, Mönchengladbach, Oldenburg, Pforzheim, Reutlingen, Rosenheim, Rostock, Schweinfurt, Siegburg, Stuttgart-Eberhard-Strasse, Viernheim, Wuppertal.
Bitter: There is a special situation in Duisburg (NRW) – there are currently two Galeria branches only a few hundred meters apart in the city center. According to BILD information, only one, the older former Kaufhof branch, has to close. The newer, former Karstadt branch in the “Forum” shopping center, on the other hand, is to remain.
In the Munich branch at Bahnhofplatz Munich, there were sometimes dramatic scenes. “Many employees cried,” said an eyewitness to BILD. Customer Erika Bauer (79) stood in front of closed doors. “For me, a closure is bad because the tram connection was ideal for me.”
Karstadt had recently slipped from one crisis to the next
► The head of the German Trade Association (HDE), Stefan Genth, sees the death of the Galeria as just a sign of the crisis in German trade. Genth to BILD: “The retail sector is feeling the crisis like no other economic sector. Pandemic-related lockdowns were followed by Russia’s terrible war of aggression in Ukraine with the energy crisis and all its consequences for price developments and consumer sentiment. Retailers feel the uncertainty of consumers directly.”
According to Genth, consumer sentiment remains subdued and the industry is characterized by uncertainty. “Since 2019 we have lost around 41,000 deals. This is a dramatic development that is leaving its mark on our inner cities.”
Most recently, the official requirements in the Corona crisis burdened the business, the group resorted to state aid, then the branches suffered from consumer reluctance after the Russian attack on the Ukraine. In addition, home-made problems caused problems for the group, the Austrian investor’s multi-billion dollar Signa holding company Rene Benko, who had merged Karstadt and Kaufhof.
► Gerd Landsberg (70), General Manager of the Association of Towns and Municipalities, to BILD: “The closure of department stores is a devastating signal for many inner cities. Department stores are still often an anchor for the city center. On the other hand, Karstadt cannot expect to be saved again and again with tax money without being able to achieve lasting effects. Where people close, we need new inner city concepts with more living space, more green space and individual shops.”
At the end of October, Galeria Karstadt Kaufhof had to seek rescue in protective shield insolvency proceedings for the second time in less than three years. In a letter to employees at the time, CEO Miguel Müllenbach named the exploding energy prices and the slump in consumption in Germany as the reason for the threatening situation of the company. From the start, the manager left no doubt that the renewed restructuring would involve significant cuts in the branch network and significant job cuts.
It is already the second attempt to get the retail giant back on the road to success with a protective shield procedure and the associated haircut.
