Germany’s last major department store group, Galeria Karstadt Kaufhof, has again applied for state aid. This was confirmed to the German Press Agency from government circles.
There was initially no information on the amount of the requested aid. Galeria boss Miguel Müllenbach recently warned in a letter to employees that the company was “again in a threatening situation”. The war in the Ukraine and high inflation set Galeria Karstadt Kaufhof back in its initially promising restructuring efforts.
State aid: Third time in two years
It is the third time in almost two years that the department store group wants to resort to state aid. At the beginning of 2021 and then again at the beginning of 2022, the company asked for state support because of the effects of the corona pandemic. The Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with a total of 680 million euros.
The group’s attempt to secure further state aid is likely to cause debate. The previous state aid for the group was controversial. Critics doubted the future viability of the department store business model or saw the Galeria owner, the Austrian real estate billionaire René Benko, as having a duty to help the tottering giant.
But there were also supporters of the aid packages, such as the German Trade Association (HDE), which justified its support for the second aid package with the importance of the group for the attraction of many city centers.