The ailing department store group is on the way to rescue from bankruptcy Galeria Karstadt Kaufhof from the Signa-Conglomerate of companies René Benko an important milestone achieved. The Essen district court opened the standard insolvency proceedings for the company on Monday, as emerged from a court announcement on the Internet on Tuesday.
With the opening of insolvency proceedings, creditors can now register their claims against Galeria Karstadt Kaufhof with the insolvency administrator. Attorney Stefan Denkhaus, who had previously only been appointed as a provisional administrator, was appointed as the insolvency administrator.
There are said to be four bidders for the company
Discussions with a possible new owner for the company are already underway. The binding offer period expired a week ago. Denkhaus had announced that there were four bidders. Final negotiations should now take place with two of them. “Both interested parties have extensive experience in German retail and also have the funds required for the upcoming investment,” Denkhaus said. He did not name the possible investors.
With the opening of the proceedings, Denkhaus takes over Galeria’s business. He wants to complete the sale sometime in April. The final decision on a takeover by a new owner is made by the meeting of creditors. According to the announcement, this will meet on May 28th at Messe Essen to vote on the insolvency plan drawn up by Denkhaus.
If 60 branches remained after the sale, about one in three would close
Galeria filed for insolvency at the Essen district court at the beginning of January. It is the third bankruptcy within three and a half years. The number of branches of the department store chain has halved during this period; there are currently 92 left. How many remain is still open. According to Denkhaus, it will involve taking over at least 60 plus X branches. “We don’t yet know how big this X is,” he said last week.
If 60 branches remained after the sale, about one in three would close. Many of the 12,800 employees therefore have to fear for their jobs. “We try to maintain the best possible branch network and really fight for every branch,” said Denkhaus. The number of remaining Galeria locations depends primarily on the ongoing negotiations with the landlords.
Sales rent of seven to eleven percent is targeted
The insolvency administrator’s goal is to reduce rents. Depending on the branch, he aims for a sales rent of seven to eleven percent, or a little more if business is doing particularly well. “It makes no sense to continue operating a branch with a rent burden of more than 30 percent.”
In the branches that are located in properties owned by Signa, the rents are often significantly higher. According to its own information, the company pays up to 30 percent of sales there. Denkhaus had already announced in January that it would close branches if there was no accommodation from the landlord.