Germany's Galeria Karstadt Kaufhof to shut stores, slash jobs
Jun 19, 2020
Germany's leading department store chain Galeria Karstadt Kaufhof will close 62 of its 172 stores, putting about 5,000 jobs at risk, as part of a restructuring plan aimed at saving the ailing firm, sources close to the talks told Reuters.
Department stores around the world, already struggling due to the rise of ecommerce, have been futher roiled by the coronavirus pandemic, with U.S. chain J.C. Penney set to shut about 200 stores after filing for bankruptcy last month.
Karstadt Kaufhof, which occupies prime locations in most German cities, announced in April it was seeking protection from creditors after its stores were force to close during the coronavirus lockdown.
Company insiders said detailed plans of the restructuring would be presented to creditors on Friday, including the possible cut of 5,000 of a total of 35,000 jobs. The company could not immediately be reached for comment.
The chain is owned by Austrian real estate investor Rene Benko's Signa Holding, who bought Karstadt in 2014 and merged it with the Kaufhof chain in 2018, then owned by Canada's Hudson's Bay.
According to the previous plans of the court-appointed administrator Frank Kebekus, up to 80 of the stores were under reivew for closure.
Germany's national retail association has warned that a third of the country's non-food stores might be threatened with closure if the government does not do more to help them.
Two-thirds of Germans say the obligation to wear masks in stores is putting them off shopping except for essentials, according to a survey by the Allensbach institute published in the WirtschaftsWoche magazine.
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