The dominant topic in the company is how many jobs will be cut and how many locations will be closed.
(Photo: IMAGO/Jürgen Ritter)
Anyone who now comes to the headquarters of Galeria Karstadt Kaufhof might think they have been put back two and a half years. As then, Arndt Geiwitz resides there as general representative, a group of consultants controls all business areas, the dominant topic is how many jobs will be cut and how many branches will be closed.
And that’s exactly the problem. Since the last bankruptcy, there has not been a real restart at the department store chain. The company still faces the same challenges, only it’s not debt-free now like it was two years ago. And now the same people as back then are supposed to pull the cart out of the dirt. To ask?
Yes. The most important: Why is Galeria resorting to the protective shield procedure again instead of finally cleaning up with the help of an insolvency administrator without false considerations?
The biggest problem is that the general representative is appointed by the owner René Benko and therefore primarily has to represent his interests. But what serves the business logic of real estate entrepreneur Benko does not necessarily have to be the right decision for the future of the department store business model.
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So it is in Benko’s interest to keep locations that belong to him, even if a rented house in the same city would offer better prospects. In the case of third-party landlords, Geiwitz has to cut the rent without hesitation – even if Galeria alienates potential partners for the future as a result of this confrontation.
Suppliers and employees were only asked to pay
What’s more: Arndt Geiwitz only needs to think in terms of a time horizon of half a year. When the insolvency plan is implemented, he gets his money – and others have to live with the consequences.
>> Read also: The end of every third branch is not enough – the five largest construction sites at Galeria
An insolvency administrator, on the other hand, would be obliged to represent the interests of all creditors equally, including suppliers and employees. At the first insolvency, these stakeholders were only asked to pay, they were not offered any real prospects. The vague statements about the future business model in the first insolvency plan have turned out to be hot air.
And how should a general representative appointed by Benko check with the necessary severity and distance whether the owner has done everything in his power to support the company and provide it with sufficient financial resources? There is no clear indication of how much money Benko has invested in the future of Galeria so far and how much of it was just loans, some of which he has already recovered.
If Galeria is to have a future, only a ruthless inventory with a neutral view of the options will help. But there is a risk of muddling through again, as with the first insolvency – which should mean the end in the long term.
More: Karstadt and Kaufhof employees fear for their jobs