Insolvency proceedings for German store Karstadt underway
April 2, 2024
Struggling German department store chain Galeria Karstadt Kaufhof has filed for insolvency for the third time, although this attempt is believed to be an attempt to free itself from its struggling owner.
A court in the western city of Essen announced the measure on Tuesday, saying it had opened the case a day earlier.
Lawyer Stefan Denkhaus will continue as insolvency administrator, taking over management of the store chain’s business.
What do we know about the Karstadt sale?
Denkhaus says he plans to finalize the sale of the company to new investors later this month. Negotiations for the sale are ongoing, with four bidders submitting initial bids, he added, saying two of the bidders are now in final negotiations.
“Both interested parties have extensive experience in the German retail sector and also have the necessary funds for the upcoming investment,” said Denkhaus, without disclosing the names of the potential investors.
However, a report in Süddeutsche Zeitung said none of the bidders is willing to acquire all of the remaining 92 department stores, which employ more than 15,000 people.
The final decision on the sale will be made by the network’s creditors. A meeting was scheduled for May 28 in Essen.
Karstadt’s financial problems
Once a household name in Germany, Karstadt has reigned supreme in the retail sector for nearly a century since it was founded in 1881. Its financial problems began in the 1980s, worsening further since then with the advent of online shopping dominating the market. .
In 2018, Karstadt merged with its long-time rival and competitor Galeria Kaufhof, when Austrian real estate giant Signa acquired the two German brands.
Source: DW
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