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Signa insolvency without consequences for Galeria for the time being?

2023-11-29T15:31:21.643Z

Highlights: Signa Holding GmbH has announced insolvency proceedings. The holding company will apply to the Commercial Court of Vienna for the opening of restructuring proceedings under self-administration. Branches in Berlin, Bielefeld, Darmstadt, Heidelberg, Stuttgart and Wuppertal are affected. The legally binding restructuring plan for Galeria provided for the closure of around a third of the 129 branches. Some of the locations have already been closed this year, and almost 20 more will close their doors in January 2024.



Status: 29.11.2023, 16:24 PM

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Signa Holding has filed for insolvency. © Monika Skolimowska/dpa

How does the Signa insolvency affect Galeria Karstadt Kaufhof? The parent company had recently promised the ailing department store giant restructuring aid in the three-digit millions.

Berlin - At the department store group Galeria Karstadt Kaufhof, company representatives have initially expressed restraint about the insolvency of Signa Holding GmbH. "The situation does not have an immediate negative impact on Galeria at the moment. We will calmly await the outcome of this orderly procedure," company sources said. Jürgen Ettl, the chairman of Galeria's general works council, did not want to comment on request so far.

The Verdi trade union is holding the Galeria management accountable. "If Signa GmbH is unable to provide its financial support as promised, the Galeria management must be prepared," said Corinna Groß, head of the retail section at Verdi. "The new bad news at Signa is causing unrest among Galeria's employees. They want job security and predictable prospects."

Restructuring proceedings in debtor-in-possession administration

Signa Holding GmbH, owned by Austrian real estate and retail entrepreneur René Benko, has announced insolvency proceedings. The holding company will apply to the Commercial Court of Vienna for the opening of restructuring proceedings under self-administration, the Signa Group announced.

René Benko's Signa Holding GmbH files for insolvency. © Marcel Kusch/dpa

The real estate and trading group consists of a complex network of companies with several hundred individual companies. This also includes Galeria Karstadt Kaufhof. At the end of 2022, Germany's last large department store group had to seek rescue in protective shield proceedings for the second time. In March 2023, the creditors' meeting approved the insolvency plan and cleared the way for the restructuring. Signa had pledged 200 million euros for this purpose, which is to flow in several tranches until 2025, the first 50 million reportedly in February.

Trade expert expects drastic consequences

Johannes Berentzen, head of the retail consultancy BBE, expects drastic effects for the group. "The restructuring plan cannot work on the earnings side because there is no investment," he said. Department stores have a chance, but Galeria has no future in its current form. "Unless an investor with trading expertise were to be found to take over the entire network, significantly change the concept and invest many 100 million euros in the modernisation of the areas," said Berentzen.

The legally binding restructuring plan for Galeria provided for the closure of around a third of the 129 branches. Some of the locations have already been closed this year, and almost 20 more will close their doors in January 2024. Branches in Berlin, Bielefeld, Darmstadt, Heidelberg, Stuttgart and Wuppertal, among others, are affected. According to the company, 92 stores will remain in the end.

Shopping center operator ECE: "It won't get any easier"

"Worried about Galeria" is Alexander Otto, head of the shopping center operator ECE. "Whether Galeria manages to get back on its feet also depends on the support of the owner. If it fails now, it won't be any easier," Otto told Wirtschaftswoche. Galeria is represented in five of the approximately 100 ECE shopping centers throughout Germany.

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"If Signa GmbH is unable to provide its financial support as promised, the Galeria management must be prepared," Verdi demands. © Thomas Banneyer/dpa

The German government is also dealing with the Signa insolvency. "Possible effects must now first be examined," said a spokeswoman for the Federal Ministry of Finance. Galeria Kaufhof Karstadt had received state support in 2021 and 2022. The Economic Stabilisation Fund (WSF) supported the company with a total of 680 million euros. Dpa

Source: merkur

All news articles on 2023-11-29

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