German department store chain Galeria Karstadt Kaufhof is in dire financial straits, writes the business newspaper Handelsblatt. In a letter to staff, the company says it is looking for “fresh capital”. The group has also already knocked on the government’s door for further state aid. In January, the company also received help from Berlin.
Earlier this month, Galeria Karstadt Kaufhof had already announced that the company wanted to cancel the collective bargaining agreement. According to that collective bargaining agreement, this is only possible if the company has ended up in an “economic emergency that threatens the survival of the company.” This situation must also have occurred as a result of an external event.
According to insiders, the department store chain has been bad for some time. There were also major financial problems in 2020. Since the beginning of this year, consumer propensity to buy has declined and energy prices have risen significantly. The department store chain has around 130 branches and is already taking all kinds of measures to reduce heating costs.
Galeria Karstadt Kaufhof was created a few years ago when the two department store chains Galeria Kaufhof and Karstadt both became the property of the Austrian Signa.
The company is reducing the number of department stores and converting them into a new chain called Galeria. However, the economy is not doing well. The rise of online shopping is also hindering the chain. The company also owns the Belgian department store chain Galeria Inno.
