German department store chain Galeria Karstadt Kaufhof has filed for bankruptcy. The retailer wants to separate itself from shareholder Signa, which is weighed down by heavy debts.
The move is not unexpected and comes in the wake of huge financial difficulties at Austrian real estate group Signa, which had promised 200 million euros to finance Galeria’s restructuring. A first part (worth fifty million) was to be paid in February, but in the current circumstances, that money is not available.
This is why the retailer now wants to distance itself from the Austrian company: the problems at Signa are causing Galeria great harm and they “hamper ongoing business and severely limit future development opportunities through high rents and expensive services”, the company says. The aim of the bankruptcy filing is to free the company from that situation. Initial talks with a potential new owner have reportedly already taken place, Lebensmittel Zeitung reports.
“Galeria’s operational success is burdened by the preconditions of the old ownership structure. We explicitly see today as a liberation”, CEO Olivier van den Bossche said. His company will remain fully operational. What impact the difficulties in Germany will have on Inno is unclear. Galeria’s Belgian subsidiary has always maintained that it will not be affected by the problems at Galeria and Signa after a successful turnaround in Belgium.