René Benko has received millions in aid from the federal government for Galeria Karstadt Kaufhof - he is making big profits with his real estate division.
That raises questions.
Munich * - dividends for the owners, while at the same time three-digit million sums of government money are being collected.
The Signa Group of Austrian investor René Benko * is confronted with this accusation - the parent company to which the German department store group “Galeria Karstadt Kaufhof” also belongs.
More state money could flow in soon.
“Kaufhauskönig is looking for fresh money” reported the “Frankfurter Allgemeine Zeitung” (FAZ) in mid-July and described how Benko, who is also very active in Munich *, wants to save his empire through the crisis.
You have to know: Much of the Benko business model remains hidden from outsiders.
Signa-Holding is not listed on the stock exchange.
The corporate network is accordingly opaque.
Department store chain in crisis: “Galeria Karstadt Kaufhof” severely affected by corona pandemic
It is well known: Benkos Signa-Holding is divided into three business areas as an umbrella organization:
the real estate business
the media business and
the retail store.
The business areas are subdivided into different, legally independent companies.
The third division, the retail business, includes, for example, the last large German department store group, “Galeria Karstadt Kaufhof”.
Department stores play an important role in the Signa Group.
Before the Corona crisis, around half of the Signa Group's retail sales came from “Galeria Karstadt Kaufhof”, according to “FAZ”.
Then the pandemic broke in: In spring 2020, the traditional department stores had to temporarily close in the first lockdown.
The post-war idea of offering all goods centrally under one roof suddenly no longer worked - people ordered en masse on the Internet.
The pedestrian zones remained empty.
"Galeria Karstadt Kaufhof" pulls the emergency brake: closures, layoffs and two billion euros in debt
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Sale at Galeria Kaufhof: Numerous retail chains across Germany are cutting their branch networks together.
© Michael Westermann / Imago
The result for "Galeria Karstadt Kaufhof": The industry giant with around 17,000 employees, which had already undergone a number of renovations, amalgamations, changes of ownership, department store closings * and job cuts, pulled the emergency brake in April 2020: "Galeria Karstadt Kaufhof" slipped under the Protective shield proceedings - a special feature of German insolvency law.
The protective shield procedure protects a company in crisis from access by creditors without the company having to file for bankruptcy.
The management can continue to steer the company and reorganize it independently.
In September 2020, “Galeria Karstadt Kaufhof” completed the insolvency proceedings - with tough cuts: it was decided to close more than 40 branches, cut around 4,000 jobs and cancel more than two billion euros in debt.
Second lockdown, second crisis: department store chain is apparently again demanding three-digit million aid
The department stores actually wanted to start up again, but the federal government decided on the second lockdown during the important Christmas business of all times - business was again idle. The management applied for state corona aid - with success: At the beginning of 2021, “Galeria Karstadt Kaufhof” received a loan of up to 460 million euros from the Federal Economic Stabilization Fund. With the fund, the Federal Ministry of Economics, led by Peter Altmaier (CDU), is pursuing the goal of cushioning the economic consequences of the pandemic in Germany.
Now “Galeria Karstadt Kaufhof” apparently needs more money from the fund.
According to "FAZ" it is again a three-digit million amount.
Nobody in the Ministry of Economics wants to confirm this: the Federal Government could not provide any information on current applications "for reasons of the obligation to keep company and trade secrets confidential," said a spokesman for the Minister of Economics.
Miguel Müllenbach, head of “Galeria Karstadt Kaufhof”, said to the “Handelsblatt” at the end of July: “We are in talks.” One thing is clear: the Benkos Signa Group's retail business remains under pressure.
Benko and the Signa Group: million dollar aid for department store group, dividends in real estate business
The situation is different in the real estate business of the Signa Group.
At the end of March, the "Handelsblatt" reported on a surprisingly high profit for the Corona year 2020. There was talk of a "rain of money" for Benko.
One of several companies in the real estate business of the Signa Group is "Signa Prime Selection AG".
A company that not only includes Vienna's premium shopping district "Goldenes Quartier", but also the pearls among department store properties: The Oberpollinger in Munich, the Alsterhaus in Hamburg and the KaDeWe in Berlin.
Millions of government aid for billionaires: Department store and real estate businesses closely linked
According to "Handelsblatt", "Signa Prime Selection AG" alone delivered a four percent dividend. According to the newspaper, “Signa Development Selection AG”, in which the entire development business is bundled, threw an eight percent dividend. Overall, Signa's real estate assets are valued at a good 20 billion euros. The "FAZ" comes to the conclusion: At least on paper, there must be increasing or stable rental income. Without a steady stream of rental income, Benko's business model would not work.
This is suspicious because Benko's real estate business is closely linked to the retail business.
The German department stores, for example, are tenants - the landlord is one of Benko's real estate companies.
The "FAZ" reports, citing internal bank documents, that almost three quarters of the income from real estate comes from Signa's own trading companies.
German government money for Austrian billionaire: pandemic aid - "Galeria Karstadt Kaufhof"
Major shareholders who are on board at one of the Signa real estate companies benefit from the booming real estate business apparently through high distributions: According to "FAZ", the co-owners include the management consultant Roland Berger, Fressnapf founder Torsten Toeller and the Swiss Ernst Tanner.
Then there are the Peugeot brothers, several insurers and pension funds, including R + V life insurance, and the RAG Foundation.
The question remains: Why should the Austrian's retail business be saved with German government money while his real estate business is apparently doing brilliantly?
Signa Group defends funds: "Galeria Karstadt Kaufhof" needs to be rescued
A spokesman for Economics Minister Peter Altmaier justified this as follows: "In addition to the balance sheet size criteria, the prerequisites include, among other things, that the company had no other financing options and that there is an independent prospect of continuation after the pandemic has been overcome." always the subject of the application review. "The prerequisite for this is that the shareholders have to participate in the financing according to their ability to do so." Otherwise, aid would not be approved.
A spokesman for the Signa Group explained: “The Signa Group consists of companies that are independent of each other, in different countries with completely different ownership structures, shareholders, management and supervisory boards. (...) A mix of interests would not be permitted for legal reasons. ”At“ Galeria Karstadt Kaufhof ”, the situation was triggered by closings ordered by the authorities. By then, the department stores had been on the right track. The main financial burden of the closings continues to be borne by the shareholders, who have invested heavily in the company. "With the future concept of Galeria, the department store as a retail format will again become a very decisive factor in lively inner cities," said the Signa spokesman.
"Galeria Karstadt Kaufhof" after corona damage: Department stores are planning a new start
At “Galeria Karstadt Kaufhof”, the plans for a new start are underway: “We will strategically realign ourselves with our 'Galeria 2.0' concept at the end of October,” said the department store manager, Miguel Müllenbach, in “Handelsblatt” at the end of July.
A new brand name is also conceivable.
Müllenbach does not see the fact that the properties in which the department stores reside belong to the real estate part of the Signa Group as an advantage: “The rental agreements that we conclude with Signa must be in line with the market,” he said.
"This is clear because the real estate division is a completely different company with a different ownership structure and different management." If the new start succeeds and the aid loans to the federal government are repaid on time, the discussion about high dividends on the one hand has turned and government money on the other hand well done.
If the restart does not succeed, this should rekindle the debate about state money.
The department store king in Munich: “Benko-Meile” between the main train station and Viktualienmarkt
Besides his department stores, RenéBenko is also very present in the Bavarian capital. Over the years he has incorporated other special real estate pearls in Munich: In autumn 2020 it was announced that the traditional department store Kaut-Bullinger on Rosenstrasse is to go to Benkos Signa. In Munich there is already talk of a “Benko mile” between the main train station * and Viktualienmarkt *.
At the end of 2013, Signa had already bought the “Old Academy” in the pedestrian zone from the Free State for 240 million euros as part of a 65-year leasehold grant. The premium department store Oberpollinger is also part of the Benko empire. The Signa Group also has a stake in the Italian grocer “Eataly” in the “Schrannenhalle” on Viktualienmarkt, which was previously shaken by bankruptcies. On request, a spokesman did not want to reveal which other properties in Munich are owned by the Signa Group.
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