In the course of the insolvency proceedings, 47 of the currently 129 department stores are to close.
(Photo: IMAGO/snowfieldphotography)
Dusseldorf, Berlin The Federal Employment Agency (BA) only wants to support the insolvent department store chain Galeria Karstadt Kaufhof with the restructuring under certain conditions. “It is important that there is a future concept for the business model,” said BA board member Daniel Terzenbach to the Handelsblatt. Just going on like this is not enough.
On Monday, the creditors want to decide on the group’s insolvency plan, which has announced that it will close 47 of the current 129 department stores. Originally there should be five more. According to the Verdi union, up to 5,000 jobs would then have been threatened. The BA is one of the major creditors alongside the Economic Stabilization Fund, banks and landlords. According to the insolvency plan, which is available to the Handelsblatt, the authority paid 96.8 million euros in insolvency money to the employees.
Terzenbach sees good opportunities for employees whose jobs are now on the brink. The labor market is receptive. The employment agency has already held consultation hours in individual Galeria branches and is planning digital “meeting rooms” with companies that could offer new professional perspectives.
However, the BA board emphasizes that it is not enough to just look at the employees who are threatened with job loss. “Galeria must also invest in the employees who remain with the company so that we don’t face the same problems again in a few years.”
After all, this is now the third insolvency procedure. First the Karstadt bankruptcy in 2009. Then the merged group Galeria Karstadt Kaufhof applied for a protective shield procedure after the first corona lockdown in 2020, subsequently closed around 40 branches and cut around 4000 jobs. In addition, more than two billion euros in debt were canceled. However, this first attempt only relieved the group temporarily.
>> Read here: Which 47 branches are affected by the closure
In October 2022, the company then applied for a protective shield procedure again because state loans and silent participations totaling 680 million euros were not enough to avert renewed insolvency.
“Galeria must also invest in the employees who remain with the company so that we don’t face the same problems again in a few years.”
(Photo: imago images/Future Image)
According to Terzenbach, the fact that many employees have stuck with the company for so long despite recurring crises shows the great solidarity there – “and what good economic conditions the company still offered”.
A transfer company, for which Labor Minister Hubertus Heil (SPD) had also campaigned, is now intended to pave the way for employees threatened by unemployment to find new jobs. The prospects are there. According to the Institute for Labor Market and Vocational Research (IAB), there are currently more than 200,000 vacancies in retail nationwide.
>> Read here: Olivier van den Bossche becomes the new Galeria boss
However, Terzenbach points out that many employees have been with Galeria Karstadt Kaufhof for a long time and therefore earn above average earnings compared to the industry. “There are always two sides to this,” says the BA board member.
On the one hand, the employees bring a lot of experience with them. On the other hand, the transition to a new job can also be more difficult because it may involve financial losses.
If the creditors’ committee approves the company’s insolvency plan on Monday, the protective shield procedure can be completed and a future can be sought for Galeria Karstadt Kaufhof. Otherwise all of the currently 17,000 employees would have to look for a new job.
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