“Rabenschwarzer Tag”: Galeria Kaufhof closes 19 branches on June 30th

“Rabenschwarzer Tag”: Galeria Kaufhof closes 19 branches on June 30th

Munich – Galeria Karstadt Kaufhof GmbH, one of Germany’s largest department store chains, is set to close 19 branches by June 30th. This decision comes as part of the company’s ongoing restructuring process following an insolvency procedure before the district court in Essen. The closure of these branches is expected to affect both the company and its employees.

The works council expressed disappointment over the decision, calling it a “pitty black day” for the company and its workforce. In a statement, the general works council criticized the company management and the insolvency administrator, stating that the decision was largely wrong but could not be prevented. Along with the 19 branches closing this month, an additional 22 branches are scheduled to close early next year.

The affected branches include locations in Celle, Coburg, Cottbus, Duisburg-Düsseldorfer Strasse, Gelsenkirchen, Hagen, Hamburg-Harburg, Hamburg-Wandsbek, Leverkusen, Munich train station, Neuss, Nuremberg-Königstrasse, Nuremberg-Langwasser, Offenbach, Paderborn, Regensburg-Neupfarrplatz, Saarbrücken, Siegen, and Wiesbaden-Kirchgasse.

The closure of these branches is a result of complicated negotiations with landlords. Galeria Karstadt Kaufhof has demanded rent reductions, grants for house modernization, and a reduction in rented space. The company aims for a branch size of around 15,000 square meters, but many locations exceed this limit.

In addition to the closures, Galeria Karstadt Kaufhof is also facing challenges in its negotiations with creditors. The company’s insolvency plan was recently approved by the creditors’ meeting, which highlighted the need to analyze the profitability of each branch and identify potential economic risks. Last year, an investor expressed interest in saving some of the Galeria branches from closure.

Looking ahead, the company plans to close an additional 28 branches on January 31, 2024. These branches include locations in Berlin-Charlottenburg, Berlin-Müllerstrasse, Bielefeld, Braunschweig, Bremen, Darmstadt-Am Weißen Turm, Dortmund, Düsseldorf-Schadowstrasse, Essen, Esslingen, Frankfurt-Zeil, Hanau, Heidelberg Bismarckplatz, Hildesheim, Kempten, Krefeld, Leonberg, Limburg, Lübeck, Mönchengladbach, Pforzheim, Reutlingen, Rosenheim, Schweinfurt, Siegburg, Stuttgart-Eberhard-Strasse, Viernheim, and Wuppertal. Operations at these locations will continue as usual until the end of the year.

The closures and restructuring efforts are part of Galeria Karstadt Kaufhof’s strategy to navigate the challenges faced by traditional brick-and-mortar retailers in an increasingly digital marketplace. The company aims to optimize its store portfolio and focus on profitable locations to ensure long-term sustainability.

How will the closure of the 19 branches impact Galeria Karstadt Kaufhof’s financial stability?

Aße, Eisenach, Erlangen, Hamm, Hanau, Heidelberg, Karlsruhe, Lübeck, Mainz, Moers, Pforzheim, Recklinghausen, Rostock, Saarbrücken, Schweinfurt, and Wilhelmshaven. These closures will result in the loss of approximately 1,000 jobs.

The closures are part of the company’s efforts to reduce costs and optimize its store portfolio in order to secure the future of the remaining branches. Galeria Karstadt Kaufhof has been facing financial difficulties for several years, with declining sales and increased competition from online retailers.

In response to the closures, the company will be offering all affected employees alternative job positions within the company wherever possible. Additionally, the management has promised to provide support and assistance to affected workers in finding new employment opportunities.

Although the decision to close these branches was a difficult one, the company believes that it is necessary for the long-term success and sustainability of the business. By focusing on its most profitable locations, Galeria Karstadt Kaufhof aims to strengthen its position in the retail market and ensure its future viability.

Despite these challenges, Galeria Karstadt Kaufhof remains committed to providing customers with a wide range of products and an enjoyable shopping experience. The company will continue to invest in its remaining branches, enhancing their offerings and services to meet evolving customer demands.

As Galeria Karstadt Kaufhof navigates through this restructuring process, it is hoped that the company can regain its financial stability and position itself for future growth. Although the closure of these 19 branches is undoubtedly a difficult and unfortunate development, it is a necessary step towards a more sustainable future for the company.