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Galeria Kaufhof branch in Leipzig: The goal is to take over 60 plus X branches

Photo: Jan Woitas/dpa

On the way to rescue from bankruptcy, the ailing department store group Galeria Karstadt Kaufhof has reached an important milestone. The Essen district court opened the so-called standard insolvency proceedings for the company on Monday, as emerged from an announcement from the court on the Internet on Tuesday. The creditors can now register their claims against Galeria Karstadt Kaufhof with the insolvency administrator. The office was given to lawyer Stefan Denkhaus, who was previously only appointed as a provisional administrator.

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.

Struggle for affordable rents

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.

Galeria filed for insolvency at the Essen district court at the beginning of January - this is the third procedure 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 will ultimately remain remains to be seen. 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 were retained after the sale, around one in three would close and many of the 12,800 employees would lose 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.

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 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.

mik/dpa AFX