Germany’s greatest division retailer information for chapter safety once more

Germany’s largest division retailer chain has filed for chapter safety for the second time in two years, heaping stress on its billionaire proprietor, René Benko, to stump up tons of of thousands and thousands to put it aside.

Galeria Karstadt Kaufhof, which operates 131 shops throughout Germany, using 17,400 employees, has already taken two bailouts from the German authorities, value €680mn.

Politicians in Berlin are reluctant to offer a 3rd with out better participation from the Austrian property mogul Benko and his Signa Group — a set of corporations that management a sprawling European property empire value greater than €24bn.

It comes after the chain first filed for creditor safety in April 2020 when it was compelled to shut shops owing to the pandemic lockdowns.

Round a 3rd of jobs at Galeria can be slashed as a part of a deliberate restructuring, the corporate’s chief government, Miguel Müllenbach, instructed the Frankfurter Allgemeine Zeitung newspaper on Monday because it utilized for chapter safety.

A spokesperson for Galeria mentioned that the corporate had held “constructive and goal-orientated” discussions with the German authorities however that the monetary phrases supplied for an extra bailout had been too onerous, and a radical restructuring was due to this fact the one choice.

“The exogenous components of the pandemic, inflation at file ranges on account of the Ukraine warfare and power costs which have elevated many occasions over, have led to [decreased footfall] in metropolis centres and a traditionally detrimental client temper,” they mentioned.

The politically delicate restructuring of Galeria shouldn’t be the one downside Benko is at the moment coping with.

Final month Austrian police raided Signa’s headquarters as a part of a sprawling anti-corruption investigation that’s trying into Benko’s political connections in Vienna and the monetary operations of his extremely complicated enterprise empire.

Benko has not been charged with any wrongdoing.

The property mogul has come beneath explicit criticism in Germany since Signa, in addition to proudly owning the working firm of Galeria, can be — through a separate company construction — the owner of a clutch of its most essential websites and has not diminished the hire it collects from them.

“Our colleagues within the 131 department shops surprise the place the proprietor is on this extraordinarily existentially threatening state of affairs for 17,400 folks and their households,” mentioned Stefanie Nutzenberger, a board member of Ver.di, Germany’s second largest commerce union. “There are clear expectations of the proprietor,” she added.

Critics have previously accused Benko of getting acquired Galeria solely due to the excessive worth of its underlying actual property.

The mid-market chain, regarded by many Germans as considerably staid, is an uncommon a part of Benko’s property conglomerate: nearly all of Signa’s different holdings are in extremely unique, luxurious developments. Signa is the co-owner of London’s Selfridges, and the Chrysler constructing in New York. The corporate additionally owns the long-lasting German division retailer KaDeWe.

German politicians have additionally referred to as on Benko to stump up additional cash to guard jobs at Galeria.

“It’s not an odd firm, however an elementary a part of many internal cities,” mentioned Reinhard Houben, a spokesman for the liberal FDP, one of many three events in Germany’s governing coalition authorities. Extra transparency was wanted, Houben mentioned, indicating that Benko must put cash into Galeria first, earlier than the state once more stepped in.

A spokesperson for Signa declined to remark. The corporate has previously mentioned that it has injected practically €1bn into Galeria to attempt to flip across the enterprise.

“With out Signa, [Galeria] would have lengthy since ceased working department shops in Germany,” Müllenbach mentioned. “My assumption is that Signa will proceed to help us with investments.”