German department store chain Galeria Karstadt Kaufhof will most likely be able to complete the bankruptcy after the meeting of creditors on Sept 1, 2020.

Karstadt Warenhaus GmbH, based in Essen, is a German department store chain. The two companies GALERIA Kaufhof GmbH and Karstadt Warenhaus GmbH have been working closely together since November 2018. From March 2019 Karstadt and Kaufhof appeared under the common name GALERIA Karstadt Kaufhof. In January 2020, the two companies were merged into one company. When the merger took effect, all rights and obligations of GALERIA Kaufhof GmbH passed to Karstadt Warenhaus GmbH, now trading as GALERIA Karstadt Kaufhof GmbH, in accordance with Section 20 UmwG.

Final Sale: There is probably no hope for the Karstadt-Haus in Düsseldorf either. (Courtesy:TextilWirtschaft.de)

For the branches of the department store group Galeria Karstadt Kaufhof, which are on the closure list, there is no hope of rescue. This is communicated by the company management to the mayors of the cities with closure locations in a letter that is available to the specialist medium TextilWirtschaft (dfv Mediengruppe). This means that 121 of the 172 department stores that are currently still in existence are likely to remain at the insolvent Essen company.

Losing a department store is often a major blow to the affected city centers, because it will further reduce their attractiveness. Numerous city leaders had therefore worked until the very end to maintain the locations, and there were also demonstrations and signature campaigns.

In the past weeks, twelve locations had been removed from the strike list, which initially comprised 80 department stores and Karstadt Sports branches. According to TextilWirtschaft, presumably because of sometimes very far-reaching concessions by homeowners on rents. However, in the branches in the cities of the mayors now contacted, “it was not possible to change the parameters so significantly that they could be continued,” quotes the TextilWirtschaft from the letter from the management.

The top managers at Galeria Karstadt Kaufhof also write, “that the decision was not an easy one for us.” However, it was necessary in order not to endanger the entire company. “We ask for your understanding for this decision.”

The criteria that were essential for the decision to close or to continue were “current and future socio-demographic parameters of the location, the location distribution in the region, the economic performance of the branch, the amount of rents and other costs and other parameters.” of the respective rental agreement “.

On April 1, Germany’s last nationwide department store company was protected by bankruptcy law. The reason for this was the dramatic drop in sales due to the shutdown. “We do not expect normal sales to be achieved in the coming months either,” says the current mayor’s letter. After presenting a restructuring plan to the court, the company has been in bankruptcy under its own management since July 1.

According to the letter, Galeria Karstadt Kaufhof “will most likely be able to complete the bankruptcy at the end of September after the meeting of creditors on September 1, 2020.”