LClosing time in the early afternoon at Galeria in Düsseldorf: “Due to a works meeting, our department store is currently closed,” reads a large sign behind the glass front. “They don’t open anymore either,” says an employee who comes from the meeting. What’s the mood like? “Shit, of course, there were endless tears.”
Since Monday afternoon it has finally been clear what has been announced for months: The last large department store chain in Germany, Galeria, will give up numerous branches. Of the currently 129 department stores with around 17,400 employees, 52 branches are to close, Galeria confirmed on Monday a report by the works council. According to the company, 4,300 jobs are to be lost, the employees assume a higher number. The company’s board of directors was supposed to meet in the afternoon.
In an internal letter that is available to WELT, the employee representatives go to court with the management. Management alone is responsible for “well over 5,000” impending job losses. There is no real interest in suggestions for improvement and ideas from the workforce. “References to sometimes blatant, often home-made errors are largely ignored, put off and almost never come into an implementation phase,” it said.
Two closing dates are mentioned, July 30, 2023 and January 31, 2024. Branches in Berlin, Hamburg-Harburg, Munich, Gelsenkirchen and Bremen are affected. The number of branch closures is below the maximum scenarios with which the insolvency administrator went into negotiations with landlords and employees.
It is less surprising which branches would have to close than the list of those branches that remained, an insider told WELT. For example, branches in Trier and Freiburg that are very close to each other remained open. In Münster, two houses that were even closer together were also to be preserved. Such dual structures were created when the Karstadt and Kaufhof chains merged.
Actually, these overlaps were seen as a way to close houses without having to leave cities entirely. There are also minor inconsistencies in the list. The house in Frankfurt listed on it was scheduled to be closed anyway. A house in Cologne that the landlord wants to demolish does not appear in the list.
The background: Galeria, which emerged from the merger of Karstadt and Kaufhof, had to seek rescue in protective shield insolvency proceedings for the second time in less than three years at the end of October. In a letter to employees at the time, CEO Miguel Müllenbach cited the exploding energy prices and the slump in consumption in Germany as the reason for the company’s threatening situation. From the start, the manager left no doubt that the renewed restructuring would involve significant cuts in the branch network and significant job cuts.
The department store chain has been sliding from one crisis to the next for years. Most recently, the official requirements in the Corona crisis had put a strain on business, the group resorted to state aid, then the branches suffered from consumer reluctance after the Russian attack on Ukraine. At the beginning of February, the district court in Essen opened insolvency proceedings against the Galeria.
In addition, the group, which belongs to the multi-billion dollar Signa Holding of the Austrian investor René Benko, who had merged Karstadt and Kaufhof, was plagued by home-made problems. Two years ago, Galeria Karstadt Kaufhof had already closed a good 40 of the then 172 branches during the insolvency proceedings at the time, with around 5,000 employees already losing their jobs.
The Galeria general representative Arndt Geiwitz, who had already accompanied the first protective shield procedure as a restructuring expert, was recently confident that thanks to the second protective shield procedure there was still a perspective for the department store group. “I am convinced that the Galeria department stores have a future, even if not in their current form,” emphasized the renovator in an interview. However, the retail giant would have to become smaller and more decentralized for this. If the creditors agree, the old leadership around the long-standing Karstadt manager Müllenbach can continue with lower costs and fewer branches. However, according to reports, creditors can expect lower payments than in the previous bankruptcy plan.
Protests in the affected cities are foreseeable. In Dortmund, where Galeria is considered the anchor of the Westenhellweg shopping street and the central Alter Markt, the Chamber of Industry and Commerce has already said: “For Dortmund, this is a serious setback as a commercial metropolis in Westphalia. The approximately 21,000 square meters of retail space make up almost a ninth of the total retail space in the city.” In the ten months until the closure, a new concept had to be developed quickly.
Former Karstadt branches have repeatedly been closed in the Ruhr area city in recent years. There is another carpet shop in the carpet house, and the large furniture and technology store has been completely renovated. Now it also hits the main branch, which was previously called the “main store”. The closure in Bremen is also considered a surprise. In the southern Hamburg district of Harburg, the closure also creates a gap in a developed district center.
In Düsseldorf, the last of two formerly neighboring Karstadt and Kaufhof stores on the Schadowstrasse shopping street is closing. “It’s unbelievable that this should be the end,” says Liliane Bloch. “I’ve been shopping here since 1970,” reports the elderly lady. “Then there will soon be nothing going on here in the corner. Unfortunately, a lot of things are going down the drain in Germany at the moment, says her companion. “It’s very sad.”
After all: the magnificent former department store on the well-known Königsallee will be preserved. In this rather luxuriously designed “Kö” branch there is no sign of the crisis. Customers enjoy their drinks at the bar next to the huge cosmetics department, there is a lot going on in the front, and discounts are advertised everywhere. Further back in the extensive watch and jewelry department, however, most of the salespeople have nothing to do that afternoon.
Have you heard about the closing of the branch in Schadowstrasse and what is the mood like here? “Wait a minute,” says a saleswoman and goes to make a quick phone call at one of the glass counters. “We can’t say anything here. Please contact the press office in Essen.”
The locations at a glance
For the 30. June 2023 the following 21 locations are to be closed:
Celle, Coburg, Cottbus, Duisburg Düsseldorfer Strasse, Erlangen, Gelsenkirchen, Hagen, Hamburg-Harburg, Hamburg-Wandsbek, Leipzig Neumarkt, Leverkusen, Munich train station, Neuss, Nuremberg Königstrasse, Nuremberg-Langwasser, Offenbach, Paderborn, Regensburg Neupfarrplatz, Saarbrücken at the train station, Siegen, Wiesbaden Kirchgasse.
For the 31 January 2024 the closure of these 31 branches is then planned:
Bayreuth, Berlin-Charlottenburg, Berlin-Müllerstraße, Bielefeld, Braunschweig, Bremen, Darmstadt at the white tower, Dortmund, Düsseldorf Schadowstraße, Essen, Esslingen, Frankfurt Zeil, Hanau, Heidelberg Bismarckplatz, Hildesheim, Kempten, Krefeld, Leonberg, Limburg, Lübeck, Mönchengladbach, Oldenburg, Pforzheim, Reutlingen, Rosenheim, Rostock, Schweinfurt, Siegburg, Stuttgart-Eberhard-Strasse, Viernheim-RNZ, Wuppertal.
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