Dusseldorf. Galeria went bankrupt this Friday – again. On October 2nd, the department store group submitted its fourth application for insolvency at the Düsseldorf District Court after 2020, 2022 and 2024. For the approximately 12,000 employees in 83 branches, this means renewed fears about the future. What was once Germany's largest department store brand is once again on the verge of extinction.
1881–1936: Four founding companies
The history of the group begins with four trading companies, which will later be merged into Galeria.
In 1879, Leonhard Tietz opened a shop for yarns, fabrics and buttons in Stralsund, from which the Kaufhof department store chain developed by 1933. In 1881, Rudolph Karstadt founded his first store in Wismar (Mecklenburg) - this became Karstadt AG.
Hertie is created as a department and department store group with up to 115 stores, including Wertheim and the KaDeWe in Berlin. Helmut Horten founded Horten AG in Düsseldorf in 1936, which became the fourth largest chain at the time behind Kaufhof, Hertie and Karstadt. The four companies determine the German department store landscape of the 20th century.
1994: The double merger
Kaufhof AG takes over its competitor Horten, Karstadt AG under Walter Deuss takes over the Hertie Group. This turns four large chains into two: Kaufhof and Karstadt. The Horten and Hertie brands gradually disappeared from the market in the following years.
1999: Karstadt takes over Quelle
Karstadt merges with the mail order company Quelle to form Karstadt Quelle AG. This creates a retail giant consisting of stationary department stores and mail order businesses. The group is at times one of the largest trading companies in Europe with around 86,000 employees.
2007: Conversion to Arcandor
Karstadt Quelle renamed itself Arcandor in 2007 under CEO Thomas Middelhoff. Middelhoff was previously Bertelsmann boss and is supposed to strategically realign the group. Just a few years after he took office, the company found itself in existential difficulties.
2009: Arcandor's first bankruptcy
Arcandor files for bankruptcy for itself and its subsidiaries Karstadt and Quelle - up to that point the largest company bankruptcy in German economic history. Numerous creditors are affected; Middelhoff had left the group a few months earlier. Quelle is wound up and Karstadt is separated from the insolvency estate as an independent department store chain.
2010: Berggruen takes over Karstadt
The investor Nicolas Berggruen joined Karstadt in June 2010 and took over the chain from bankruptcy. However, the hoped-for turnaround does not materialize and sales and the number of branches continue to shrink. Berggruen retired in 2014.
2014: Benko takes over Karstadt
The Tyrolean real estate investor René Benko is taking over Karstadt with his Signa Holding. Signa had previously secured department store properties from the chain. Berggruen complains that Karstadt was “not a good deal” for him. Benko announces that he now wants to thoroughly renovate Karstadt.
2015-2018: Kaufhof moves to Hudson's Bay
Karstadt competitor Kaufhof, a founding member of the German Dax stock index in 1988, is being sold by its previous owner Metro to the Hudson's Bay (HBC) trading group. The North Americans are talking about a “rebirth” of the department store and want to integrate the branches more closely with online business.
The entry did not bring the hoped-for success, and in 2018 Hudson's Bay gradually exited again. The Federal Cartel Office approves the merger of Karstadt and Kaufhof under Signa's direction.
2018/2019: Merger to Galeria Karstadt Kaufhof
Karstadt and Kaufhof merge to form Galeria Karstadt Kaufhof GmbH, based in Essen. The Cartel Office previously explicitly described both as the “only remaining nationwide department store groups” in Germany. This created what is now the last large, nationwide department store group in the country with 32,000 employees at the time.
The merger is seen as an opportunity to combat growing online competition. Karstadt boss Stephan Fanderl leads the new company. However, the hoped-for synergies do not materialize. Benko, meanwhile, takes sole control of Galeria Karstadt Kaufhof. Hudson's Bay is exiting operations.
2020: Galeria's first bankruptcy
Galeria files for bankruptcy in the wake of the corona pandemic and the lockdowns. Of the approximately 170 branches, 40 will be closed and around 4,000 jobs will be lost. Miguel Müllenbach will become CEO. The group is undergoing a protective shield procedure and is restructuring itself under self-administration.
2021: Galeria receives state loan
After another Corona lockdown with officially ordered branch closures, the company received a government loan of 460 million euros. Online retailers such as Amazon and Zalando are benefiting from the crisis.
2022: Galeria's second bankruptcy
Only around two years later, the third bankruptcy followed - and the second for Galeria. The group will receive a further 220 million euros in state aid from the federal government. But consumer sentiment is not improving due to high inflation. The company is making a second attempt at protective shield proceedings and wants to give up at least a third of its 131 branches. The state rescue fund WSF has to write off a large part of the 680 million euros in aid money.
2023: Olivier Van den Bossche becomes CEO
Olivier Van den Bossche replaces Müllenbach as CEO. The creditors approve a restructuring plan with the closure of 47 of the 129 department stores. At the same time, owner Signa finds itself in crisis due to rising interest rates and high refinancing costs.
2024: Galeria's third bankruptcy
Owner Signa will go bankrupt in 2023/24, and René Benko will completely lose his influence over Galeria. After the Signa bankruptcy, Galeria also had to file for bankruptcy again. After closing 16 more stores, Galeria with 83 branches and around 12,000 employees is leaving the insolvency proceedings.
2025: Black numbers and new company name
The new owners draw an initial positive assessment. According to co-owner Bernd Beetz, all 83 remaining branches are in the black. Kaufhof and Karstadt have now disappeared from the company name; the company only operates under the Galeria brand.
October 2, 2026: Galeria's fourth bankruptcy
Galeria is initially securing financing with a credit line of up to 160 million euros until 2029. But things are not going smoothly. In July, the group will put 33 of its 83 department stores to the test. In October, Galeria filed for bankruptcy for the fourth time in six years. Around 12,000 employees once again have to fear for their future.
