Galeria bankruptcy

Administrator recommends acceptance of the insolvency plan

The Galeria department store chain was previously part of René Benko's collapsing Signa empire.

(Bild: AFP/Ina Fassbender)

Stefan Denkhaus, the insolvency administrator of the last major German department store chain Galeria Karstadt Kaufhof, which previously belonged to René Benko's crumbling Signa empire, is calling on creditors to accept the insolvency plan. He recommended a vote in favor of the plan, he said on Monday.

"Because the alternative would be to break up the company," warned Denkhaus. As a department store with an anchor function, the Group is also of "considerable importance for the future of city centres". "I am convinced that Galeria has a good future with its management and investors," Denkhaus emphasized.

Insolvency ratio of 2.5 to three percent expected
The creditors of the department store chain, for which the Essen district court opened insolvency proceedings on April 1, 2024, will meet on Tuesday to vote on the insolvency plan. According to Denkhaus, it expects an insolvency ratio of 2.5 to three percent - creditors and suppliers must therefore be prepared to make significant cuts to their claims.

Signa bankruptcy causes imbalance at Galeria
However, the insolvency ratio could increase even further if Galeria receives payments from claims against companies of the former Austrian parent company Signa. Signa Holding, owned by Tyrolean investor René Benko, had slipped into bankruptcy and thus also caused the imbalance at Galeria.

16 of the 92 department stores will be closed
Galeria is now to go to new owners. The department store chain is to be taken over by Bernd Beetz, former CEO of the cosmetics group Coty, and the Canadian retail entrepreneur Richard Baker. At the end of April, Galeria Karstadt Kaufhof announced its intention to close 16 of its 92 remaining department stores and cut around 1,400 of its current 12,800 jobs.

Already slipped into insolvency three times 
Fierce competition from online retailers, home-made problems and frequent changes in strategy had accelerated the decline of the last major German department store group. Galeria Karstadt Kaufhof suffered a total of three insolvencies in just over three years. The chain fled under the protective umbrella twice during the coronavirus crisis alone. Galeria's creditors include the German state, which has helped with 680 million euros.