Signa Holding, the holding that owns department store chains like Galeria, has filed for insolvency. The group hopes to be able to restructure under protection of the courts.
Pressure on the retail sector
The empire of Austrian entrepreneur René Benko is facing serious liquidity problems, due to the economic pressure on physical retail in Europe. Investments in this area have not been as successful as expected, the Lebensmittel Zeitung quotes the retail group. Moreover, the group’s real estate business is struggling as well.
The court will soon appoint an administrator. Arndt Geiwitz, who recently joined the group as a restructuring expert, will remain an adviser for the time being. Geiwitz had hoped to raise 500 million euros from American fund Elliott to finance a reorganisation, but was unable to do so. This month, Benko reportedly sold 11.5 % of his own shares to Arthur Eugster, a Swiss manufacturer of coffee machines for companies such as Miele and Melitta.
Before the weekend, subsidiary Signa Real Estate Management Germany had already filed for insolvency, following which Galeria threatened not to pay rent to the parent company in December as wanted to avoid being duped by a potential bankruptcy. The Vienna court will now decide what happens next.