New start for department store chain Galeria: Court lifts insolvency proceedings

Almost seven months after Galeria Karstadt Kaufhof filed for bankruptcy for the third time in three and a half years, the Essen District Court in Germany has given the green light for a fresh start.

The district court has decided to lift the insolvency proceedings as of July 31, according to a statement on Monday. The creditors had already approved the insolvency administrator's restructuring plan at the end of May.

Insolvency administrator Stefan Deckshaus also explained in a statement from Galeria that it had been possible to reduce the cost structure of the department store chain to a reasonable level in many areas. The department store group now has a good economic starting position and is starting the future with available liquidity in the nine-digit range. Nevertheless, he would like a grace period for the concept and the group.

"New governments or ministers usually get a grace period of 100 days," says Denkhaus. "I would like Galeria to get that too with the new owners. Ideally 300 days to implement the future concept step by step."

New owners take over on August 1

The future of the department store group, which will once again operate on its own responsibility from August 1st, will be shaped by the new ownership consortium. This consists of the US investment company NRDC and an investment company owned by the entrepreneur Bernd Beetz, who took over Galeria in April. The new shareholders intend to continue the restructuring process together with the management, according to a statement from Essen. Managing director Olivier Van den Bossche, who took over the helm after the conclusion of the previous insolvency proceedings, will remain on board. He will continue to focus on the "core competence" as a department store with a local focus and branch modernization.

"We will now start a new corporate culture in close collaboration with management and staff," says Beetz. "Together, we will tackle the implementation of the agreed concepts with the aim of making our branches more attractive, rewarding performance more and increasing the satisfaction of our customers."

Of the 92 branches that existed at the start of the process, 83 department stores were saved, seven more than planned at the time of the takeover. However, it was not possible to avoid closures entirely, especially since high rents, in addition to the link to the Signa insolvency network, were one of the main reasons for the renewed restructuring process. The department store group's current list of cuts includes branches at the Ringcenter and Tempelhof in Berlin, in Essen and Wesel in North Rhine-Westphalia, in Augsburg and Regensburg in Bavaria, in Trier in Rhineland-Palatinate, in Leonberg in Baden-Württemberg, in Potsdam in Brandenburg and in Chemnitz in Saxony.

However, the biggest cuts will be made at Galeria's headquarters in Essen, which is to be relocated to Düsseldorf at the beginning of 2025. In total, around 900 jobs were lost as a result of the insolvency; around 12,000 were retained.

This article was originally published on FashionUnited.DE, translated and edited to English.