Fewer closures at Galeria Karstadt Kaufhof

Fewer closures at Galeria Karstadt Kaufhof

German department store chain Galeria Karstadt Kaufhof will close six fewer stores than initially planned, following negotiations with landlords. As a result, some 750 endangered jobs will be saved. 


"Become a strong and stable retailer again"

The department store group has been able to agree more favourable rental conditions with some real estate owners. As a result, the retailer sees a future for the Karstadt stores in Dortmund, Nuremberg Lorenzkirche, Goslar and Potsdam and for the Kaufhof stores in Chemnitz and Leverkusen. Around 750 employees will be able to keep their jobs. Instead of 62 stores, 56 of the 172 stores are now threatened with closure. Top executive Miguel Müllenbach reports in a letter to the company's employees that there are no good prospects for these locations due to too high rents and/or an unfavourable location.

However, he remains convinced that the department stores will play an important role once the corona crisis has been overcome. "We will redevelop and reposition Galeria Karstadt Kaufhof in such a way that we will once again become a strong and stable retailer, both in terms of our physical and online activities," he tells Bild. The retailer will be "the pacemaker of change", he hopes.


1.4 billion euros loss of sales

In mid-June, Galeria Karstadt Kaufhof reached an agreement on a social plan involving the closure of 62 branches in 47 cities. The group also intends to close 20 of the 30 branches of its subsidiary Karstadt Sports and up to 24 branches of the food division Karstadt Feinkost. The corona crisis would cost the retailer as much as 1,4 billion euros in turnover.

For the time being, the heavy restructuring has no impact on Belgian subsidiary Galeria Inno. That department store chain has developed a strategic plan to once again become a future-proof, agile retailer. Inno wants to become a leading omni-channel luxury department store. The company is talking to some potential food partners and will open a new online platform next spring, which will greatly expand the range of products and services.

The department store sector is in particularly heavy weather. Nevertheless, these founders of modern retail have a future, write department store connoisseur (and former Inno-CEO) Erik Van Heuven and RetailDetail chief editor Stefan Van Rompaey in their book The Future of Department Stores.