Kaufhof department store in Leipzig to be retained after all

Galeria Karstadt Kaufhof will not close its store in Leipzig after all. A company spokesman said Thursday that the department store will remain open because of further concessions from the landlord. The same applies to the stores in Bayreuth, Erlangen, Oldenburg and Rostock. The number of planned store closures at Germany's last major department store group is thus reduced to 47, while the number of continuing houses rises to 82.

Galeria had announced on Monday that it would close 52 of the 129 department stores that were last still open. Thousands of jobs are to be cut in the course of the ongoing insolvency proceedings. For the locations such as Leipzig there is "no positive continuation perspective in view of the economic framework conditions, the local conditions and also after intensive negotiations with landlords and cities," it said. The department stores in Chemnitz and Dresden, however, should remain.

In Leipzig should be end of June. There, the neighboring Karstadt department store on Petersstrasse had already been closed a few years ago. The city leadership reacted on Monday disappointed. To the latest development, Lord Mayor Burkhard Jung (SPD) wanted to make a statement in the afternoon in front of City Hall.

After the announced exit for the Leipzig branch, new concepts for the city center had already been discussed. The trade union Verdi welcomed on Thursday that the company could avert the closure. Now the management must put "a sustainable future-oriented department store concept on the table", it said.

The department store group had to seek rescue in a protective shield insolvency proceedings at the end of October. As a reason for the threatening situation of the enterprise mentioned group boss Miguel Müllenbach at that time the exploding energy prices and the consumption slump in Germany. However, the central works council also held management errors partly responsible for the group's crisis.

According to the department store group's plans, the remaining stores are all to be comprehensively modernized over the next three years. In the future, the group wants to focus its product range primarily on clothing, beauty care and home accessories. The stores are also to be given greater autonomy in designing their product ranges. Referring to the planned package of measures, Galeria CEO Miguel Müllenbach said: "The department store in Germany thus has a future." However, the creditors' meeting on March 27 in Essen still has to give the green light before the new start. If it rejects the insolvency plan, the company faces immediate exit.

It is already the second attempt to bring the retail giant permanently back on track for success through a protective shield procedure and the associated debt cut. A first attempt, launched in 2020 during the first Corona lockdown, had brought the company only temporary relief despite the closure of around 40 stores, the elimination of some 4,000 jobs and the cancellation of more than two billion euros in debt.