The new owners of German department store chain Galeria Karstadt Kaufhof aim to retain seventy locations, but some difficult hurdles remain – such as agreement of the property owners and creditors. Belgian subsidiary Inno is not part of the deal and is still looking for a saviour.
Entrepreneurial courage
Hudson’s Bay’s owner, investment group NRDC, is taking over Galeria Karstadt Kaufhof through a consortium with German entrepreneur Bernd Beetz and his investment fund BB Kapital. After the takeover, Beetz (73) will lead the department store group as chairman, together with the existing management team and CEO Olivier van den Bossche.
On Tuesday, this was notarised in an investor agreement, which also states that the new owners aim to retain more than 70 of the 92 stores. Administrator Stefan Denkhaus said the acquirers had impressed him with their “entrepreneurial courage, viable business concept and proven financial solidity”.
Way of life
However, the precise outcome still remains to be seen. First it is up to the owners of the real estate, who are currently still negotiating the contracts. After them, the court and creditors also have to approve the insolvency plan – which is currently scheduled for the end of May.
If all goes well, Denkhaus plans to pass the torch to the new owners by the end of July. They are already convinced they can get Galeria back on track, as “department stores are part of the German way of life”. First, nevertheless, there will still be extensive restructuring: the headquarters in Essen are already certain to close and more than 450 administrative positions – half of the total – will be lost.
This deal means that Belgian subsidiary Inno finds itself in an awkward position: initially, it was kept out of the Galeria proceedings to ensure that a separate sale would bring much-needed cash to the ailing German group. However, that now means that Inno does not take part in the solution found for Galeria, and that it remains to be seen what future there is left for the Belgian stores.
