Germany's Largest Department Store Chain Seeks Insolvency Protection for the Third Time

Galeria Karstadt Kaufhof, Germany's remaining large department store chain, has applied for bankruptcy protection for the third time in under four years, as its owner faces financial setbacks.

The chain, with 92 locations and over 15,000 staff, is actively looking for a new owner through ongoing investor discussions.

The chain's parent company and other entities owned by Austrian tycoon René Benko have previously filed for bankruptcy.

Galeria emerged from a merger between Karstadt and Kaufhof and had to close about 40 stores and lay off 4,000 employees during the 2020 COVID-19 lockdown, despite receiving €680 million in government aid.

In October 2022, facing rising energy costs, inflation, and declining consumer spending, Galeria sought creditor protection and recently announced more store closings, with the final 18 stores closing this month.

Galeria's CEO, Olivier van den Bossche, cited the burdensome former ownership structure and the negative impact of Signa Group's insolvencies on the company's operation and growth potential due to high rent and service costs. Signa had committed €200 million to support Galeria's restructuring efforts through the next year.