Galeria Karstadt Kaufhof has again applied for a protective cover process. Of the 131 departmental stores across the country, over 40 are to be closed. Hessian branches are also probably affected.
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Galleria Karstad Kaufhof – Penal Hessian Branches
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For the second time in two years, department store conglomerate Galleria Karstedt Kaufhof has filed for bankruptcy with safeguard proceedings. Company boss Miguel Mullenbach announced in an interview with FAZ that for this reason 40 of the remaining 131 branches across the country will remain closed essential, Layoffs are inevitable.
Both increased energy prices and inflation have led to “historically negative consumer mood and thus general reluctance on the part of customers”, Mullenbach explained.
Branches in Hesse affected?
In Hesse, the group operates Total. 15 departmental store, two each in Darmstadt, Wiesbaden and Frankfurt. Now it is rumored that some of these branches may be closed. Galleria’s bankruptcy administrator Arndt Geewitz has already spoken of serious cuts.
It has not yet been announced which department stores may be affected by the closures. Marcel Schaubl, the negotiation manager for Verdi Union in Hesse, thinks it is clear it could affect the double places. You can certainly expect more information in the next few days. Working councils did not want to comment on the plans on Tuesday.
According to Wordy Union, it is now a matter of saving as many jobs as possible. Schaubl explains that they are looking for a viable concept that will take the operative business forward.
protective shield action
In the bankruptcy version geared toward restructuring, a court-appointed administrator oversees the defense while the company maintains management control but is advised by an external restructuring specialist.
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State aid not enough
In February 2021 and February this year, the department store group received a total of 680 million euros in state aid. Much of it went into concept conversions at six locations in Germany, says Schäuble. Invested in online shop as well.
In 2020, the city of Frankfurt and the group announced in a joint press release that they would keep the Konstablerwache branch until at least 2025. In addition, “operational layoffs should be largely ruled out,” it said at the time. It remains to be seen whether the two branches will remain in Frankfurt.
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Galleria again bankrupt
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The President of the Association of Cities, Marcus Levey, believes department stores remain attractions in inner cities and encourage trade and gastronomy. So the German Association of Cities wants to work to save places and jobs.
Second security cover process already
As part of the security cover process in spring 2020, around 40 branches were closed and around 4,000 jobs were lost. In addition, more than two billion euros of debt were canceled. In Hesse, this meant the end of the group’s four department stores, two branches in Frankfurt and one each in Sulzbach (Main-Taunus) and Fulda.
Galleria operates department stores in 97 cities across the country with 17,400 employees.
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