Retail experts do not believe in a future for the insolvent department store group Galeria Karstadt Kaufhof (GKK).
“The third bankruptcy will mark the end of a piece of German retail history; it will most likely lead to the end of Galeria Karstadt Kaufhof,” said Johannes Berentzen from the BBE trading consultancy to the German Press Agency. He does not assume that investors take over the entire Galeria group.
The department store chain Galeria Karstadt Kaufhof filed for bankruptcy again at the Essen district court on Tuesday. Galeria, currently part of the Signa Group, is looking for a new owner. Discussions with potential investors have already begun, it said. The aim is to continue Galeria.
Business model not sustainable
“A relief move and significant changes were also announced in the last two bankruptcies. Why should it work now when there is no additional money?” said Berentzen. He does not consider GKK’s current business model to be sustainable. “The principle, if possible Offering a lot of selection at good prices without a recognizable target group, online marketplaces like Amazon are much cheaper and easier for customers.”
Berentzen can still imagine that individual branches could be interesting for investors. “Filet pieces could be interesting for Breuninger, the Central Group or other strategic investors. With the Droege Group, another financially strong potential buyer has been brought into play.” However, the retail expert does not expect that a total of more than 20 Galeria locations will remain as department stores.
Jörg Funder from Worms University said: “I expect that it will end in a break-up and that individual locations will be continued by a third party in a completely changed operating model. At some point you have to acknowledge that the business model is no longer viable.”
From the retail expert’s point of view, a concession model would have a particular chance at the remaining locations: a department store with many tenants in one area. The goods remain the property of the supplier until they are collected. “The operators have no risk that goods will not be sold and also have no capital tied up in the form of their own inventory. They only provide the service, control the branch and provide the infrastructure with cash registers and IT.” (dpa)