German department store giant Galeria could file for insolvency again

According to several newspaper reports, the German Signa retail subsidiary Galeria Karstadt Kaufhof could face insolvency again. The time could come as early as tomorrow, Tuesday. The reason for this is likely to be a lack of financing from the Signa parent company following the insolvency of the holding company in November. It would be the third insolvency of the German department store chain within three years. Newspapers such as the NZZ and SZ report that an insolvency application will be filed this week “with a probability bordering on certainty”. There was no official statement from Galeria itself.

Galeria is threatened with over-indebtedness. During the last restructuring of the department store chain, the Signa holding company had undertaken to pay Galeria a net amount of 200 million euros. Although half of this was landlord subsidies for Signa buildings, the first payment tranche of 50 million euros should have been made in February. However, following the insolvency of Signa Holding in November, it is unlikely that this money will be paid out. Liquidity could also be affected, as the Galeria Supervisory Board has stipulated that it must not fall below 90 million Euros, reports the FAZ.

In the event of another insolvency, 12,500 jobs and 110 department stores would be at stake. According to the FAZ, it is unlikely that the company will be restructured under self-administration again, which is why potential buyers are already being sought in the background. The FAZ names the Thai Central Group, which already holds the operational majority of the KaDeWe Group, as a possible candidate. According to SZ, talks are being held with the financial investor Droege Group, but there is no confirmation of this.