Due to the insolvency of the department store chain Galeria, significantly more branches could be closed than previously assumed. According to an internal letter from the general works council, up to 90 shops are threatened with closure. Up to 30 percent of the staff could also be reduced in the other branches.
At the end of October, Germany’s last major department store group, Galeria Karstadt Kaufhof, announced that it was seeking rescue in protective shield proceedings for the second time in less than two years. More than 40 of the remaining 131 houses are said to be closed.
But now an internal letter from the general works council reveals that up to 90 branches are on the verge of closure. The “Lebensmittelzeitung” reported first. Up to 30 percent of the staff could also be reduced in the other branches, it is said. This is intended to reduce the personnel cost ratio by three percent below the current average, reports the “Lebensmittelzeitung”. Savings are to be made in the service center in particular. Up to half of the staff could be eliminated here. However, the negotiations would continue, according to insolvency administrator Arndt Geiwitz. Final decisions have not yet been made.
The letter was emailed to employees. The 90 branch closures would relate to talks with the employer side, it said. Dual locations in particular could be affected. Galeria employs 17,000 people. The company is managing the bankruptcy itself. The management announced at the end of October that the branches could not be operated profitably due to sluggish consumption, inflation and high energy costs.
At the beginning of 2021 and then again at the beginning of 2022, the company asked for state support because of the effects of the corona pandemic. The Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with a total of 680 million euros.
