A German department store chain closes 40% of its outlets
Germany’s last major department store chain has announced plans to close two-fifths of its branches, months after filing for insolvency protection for the second time in less than three years
BERLIN– Germany’s last major department store chain announced plans on Monday to close two-fifths of its branches, months after filing for insolvency protection for the second time in less than three years.
The long-struggling Galeria Karstadt Kaufhof plans to close 52 of its current 129 stores in two phases, with the first closing at the end of June and the others at the end of January.
It said around 4,000 employees at those stores would be affected and another 300 jobs would be cut at its headquarters in Essen and in other areas such as IT and facilities management.
The company said that due to economic circumstances and “local conditions”, and after “intensive negotiations” with landlords and municipal authorities, there was no positive outlook for the stores which were to be removed.
The remaining 77 stores will be upgraded over the next three years with ranges more suited to local needs, with 11,000 jobs safeguarded, Galeria Karstadt Kaufhof said in a statement.
The company, which arose from the merger a few years ago of rivals Karstadt and Kaufhof, took shelter from creditors in late October, citing a sharp rise in energy prices, high inflation and weak spending of consumption.
It had already closed around 40 stores and cut some 4,000 jobs after seeking protection during the first coronavirus pandemic lockdown in April 2020, and reportedly received 680 million euros ($724 million) in aid from State.
ABC News
