The ailing German department store group Galeria Karstadt Kaufhof has reached an agreement on a social plan: 62 of the 172 stores will close, which is not as much as initially feared.
6,000 jobs at risk
Until a few weeks ago, as many as 80 stores were at risk: a drastic restructuring plan that was not to the liking of the trade unions. German media now report that a deal is struck to close 62 of the 172 stores. Approximately 6,000 of the 28,000 employees will lose their jobs as a result – that is, if the restructuring plans are indeed formally approved.
The German merger group is part of the Signa Group of Austrian investor René Benko and is under creditor protection since April. The department store chain has been in difficulty for some time. As a result of the merger, restructuring was expected anyway and the corona crisis has exacerbated the problems. This may have made restructuring both more urgent and more acceptable.
The Belgian department store chain Galeria Inno, which is also part of the group, can breathe more calmly now that the parent company is being given oxygen again. In a recent interview with RetailDetail, CEO Armin Devender stressed that Inno will emerge stronger from the crisis, with refurbished stores, a positioning as an omni-channel luxury department store and a stronger focus on food.
Lannoo Campus recently published the book ‘The Future of Department Stores’, in which retail expert Erik Van Heuven and journalist Stefan Van Rompaey (RetailDetail) explore the world of department stores. Discussions with international investors and managers map out the challenges and opportunities for this fascinating retail sector.
