Crisis for department store chain Galeria Karstadt Kaufhof requests state aid again
Berlin/Essen · Germany's last major department store group Galeria Karstadt Kaufhof has again applied for state aid. This was confirmed to Deutsche Presse-Agentur from government circles. There was initially no information on the amount of aid requested.
Galeria CEO Miguel Müllenbach had only recently warned in a letter to employees that the company was "once again in a threatening situation". He said the war in Ukraine and high inflation had set Galeria Karstadt Kaufhof back badly in its initially promising restructuring efforts.
This is the third time in just under two years that the department store group has had to resort to state aid. Already at the beginning of 2021 and then again at the beginning of 2022, the company had asked for government support due to the effects of the coronavirus pandemic. The Economic Stabilization Fund (WSF) provided the company, which has a long history, with a total of 680 million euros in two aid initiatives.
Galeria Karstadt Kaufhof’s attempt to secure further state aid is likely to cause debate. Previous state aid for the group was already controversial. Critics doubted the future viability of the department store business model or saw the Galeria owner, Austrian real estate billionaire René Benko, as being able to help the tottering giant.
But there were also supporters of the aid packages, such as the German Retail Association (Handelsverband Deutschland, HDE), which justified its support for the second aid package, pointing out the importance of Galeria Karstadt Kaufhof for the appeal of many city centers.
(Orig. text: dpa / Translation: Carol Kloeppel)
