Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
The German warehouse group Galeria Karstadt Kaufhof has announced that it will close 16 shops in Berlin, Essen, Cologne, Wesel, Augsburg, Regensburg, Würzburg, Chemnitz, Leonberg, Mainz, Mannheim, Oldenburg, Potsdam and Trier, thereby cutting 1400 jobs.
The financially ailing warehouse group will close 16 of its 92 shops by 31 August 2024. The warehouse group filed for insolvency at the beginning of January 2024. According to the insolvency administrator, the decisive factor in deciding which locations to close was the prospect of timely profitability, in which the rent level played an important role.
One of the reasons for the current difficult situation is the insolvency of the Signa Group, previously owned by Rene Benko. As a result, funds promised for the reorganisation of the warehouse chain in the course of Benko's last insolvency have no longer been paid. Of the approximately 12,800 employees, 1,400 will lose their jobs. According to the company, a reconciliation of interests and a social plan were agreed with the general works council.
The service trade union Verdi sharply criticised the new closure plans. Thousands of employees had foregone considerable salary components in recent years in order to save the group, said the trade unionist.
The last restructuring event of the company has been recorded in the ERM events database Galeria Karstadt Kaufhof 2020 - DE.
Update 31/08/2024:
Since August 01, 2024, the new owner of the warehouse group is the U.S. investment firm NRDC and a holding company owned by entrepreneur Bernd Beetz. As part of the insolvency administrator's restructuring plan, stores with excessively high rents were to be closed. However, negotiations with landlords have allowed seven locations to be preserved. As a result, only 9 instead of the planned 16 stores will close. A total of 83 out of 92 locations will continue to operate. Approximately 600 jobs were saved, meaning that instead of 1,400 employees, only 800 will lose their jobs. This concludes the insolvency proceedings.
Eurofound (2024), Galeria Karstadt Kaufhof, Closure in Germany, factsheet number 201182, European Restructuring Monitor. Dublin, https://apps.eurofound.europa.eu/restructuring-events/detail/201182.