Following the takeover, German department store chain Galeria plans to maintain operation in 76 out of its 92 stores, representing a substantial portion of its retail footprint. However, significant restructuring is underway, including a reduction of half of the head office staff.
Lease negotiations and closure of unprofitable stores
Since the acquisition by Galeria Karstadt Kaufhof, negotiations have been ongoing regarding store leases. Administrator Stefan Denkhaus, alongside new owners, aimed to secure leases that would account for 7 to 11% of turnover, crucial for ensuring profitability. Unfortunately, despite efforts, economic viability could not be achieved for 16 department stores. These closures primarily affect stores in smaller or medium-sized towns, with three branches also shutting down in Berlin.
Job losses and support for affected employees
Out of the 12,800 total employees, approximately 1,400 will be laid off. The Essen headquarters will see a significant reduction in staff, with Galeria transitioning to a smaller office space. A dedicated effort will be made to assist affected employees in finding new employment over an eight-month period.
Relaunch plans and pending approval
While the decision to retain 76 stores exceeds initial expectations, formal submission of the relaunch plan to creditors is pending, scheduled for a vote on May 28th. Administrator Denkhaus aims to finalize the company’s transfer to new owners by the end of July. However, Galeria’s Belgian subsidiary, Inno, will not be part of this transfer, as urgency mounts to secure a buyer.
