In Germany, the Galeria Karstadt chain will close 52 department stores

It is an emblematic sign of German city centers. Although little known in France, it is however compared to Galeries Lafayette. The department store chain Gallery Karstadt Kaufhof will close 52 of its 129 stores in Germany, the company, which has been struggling for several years, announced on Monday. “After intense negotiations with donors and cities, there is no prospect of continued activity” for these 52 establishments, scattered throughout Germany, the statement said.

Around 4,000 employees are threatened by these closures, as well as 300 positions located at the head office in Essen, in North Rhine-Westphalia (West) and in IT services. These employees “will be offered to join another company”, promises Galeria, in the safeguard procedure since November 2022. A first wave of closures will take place on June 30, the second on January 31, 2024.

An aging image

“It’s a black day for the people of Galeria,” reacted the Verdi union in a press release. He calls for an “urgent” change in the direction of the company, because of which “employees are paying the price”.

In search of profitability, the chain also plans to “in depth modernize” its 77 remaining stores over the next three years, so that they become “a popular meeting point in city centers”.

These brands, more than a hundred years old, have been in turmoil for several years. The impact of the pandemic has added to the dislike of the Germans for this concept of generalist stores with a dusty image, supplanted by shopping centers with multiple brands and the giants of e-commerce.

“The department store has a future”

Galeria now wants to offer “attractive catering offers […] sewing workshops, dry cleaners or services to citizens”. Subsidiaries will be more connected, autonomous and focused on local and regional needs, the press release promises.

“The department store in Germany has a future,” assures CEO Miguel Müllenbach, at a time of competition with e-commerce behemoths like Amazon. Galeria Karstadt Kaufhof also suffered from inflation fueled by the Russian war in Ukraine. In 2020, a first bankruptcy filing was filed, resulting in the closure of 40 stores and 4,000 job cuts.

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