The KaDeWe Group with the luxury department stores KaDeWe (Berlin), Oberpollinger (Munich) and Alsterhaus (Hamburg) has filed for bankruptcy.
However, the company informed the German Press Agency on Monday that the operations of the houses will continue. An application was therefore made for insolvency proceedings under self-administration. The trading company emphasized that the rents at the three locations in particular are putting a strain on business. They made “sustainable, profitable economic activity almost impossible,” it was said.
The insolvency of the trading company The KaDeWe Group GmbH follows a few weeks after the Signa company network of the Austrian investor René Benko ran into difficulties. Signa holds a stake in the KaDeWe Group.
Companies that have good prospects of continuing business operations usually apply for insolvency under self-administration rather than with the help of an insolvency administrator. It is a variant of insolvency law that aims to restructure a company instead of winding it up.
50.1 percent of the KaDeWe Group belongs to the Central Group of the Thai family Chirathivat and 49.9 percent to Signa Retail, which also owns Galeria Karstadt Kaufhof. Signa Retail announced at the end of November that it would wind up its business in an orderly manner. Galeria Karstadt Kaufhof filed for insolvency proceedings three weeks ago.
Index rents for department stores “disproportionately high”
KaDeWe managing director Michael Peterseim was still confident at the end of November that the group would not get caught up in the Signa crisis. “Operationally, we are doing an outstanding job. All houses are recording increasing sales even in economically difficult times,” said Peterseim, according to the announcement. “However, the index rents are disproportionately high, they are not in line with the market – and are expected to continue to rise.” Numerous discussions with the landlord have not changed this.
The KaDeWe Group is the operator of the traditional department stores in Berlin, Hamburg and Munich. René Benko is her landlord through Signa.
According to Monday’s announcement, the KaDeWe Group generated sales of almost 728 million euros in the 2022/2023 financial year – an increase of almost 24 percent compared to the pre-Corona financial year 2018/2019. According to its own information, the group employs around 900 people at KaDeWe in Berlin. There are also around 200 employees in the Alsterhaus, around 300 employees in the Oberpollinger and another 300 employees in the Berlin headquarters.
Consultant: Luxury continues to work
The head of the BBE trading consultancy, Johannes Berentzen, estimates the KaDeWe Group’s rental burden to be between 13 and 20 percent of sales, depending on the location. “For the majority owner Central, bankruptcy could be worthwhile in order to get out of the expensive rental agreements.” Berentzen emphasized: “I am sure that things will continue in all three houses.” Luxury works well despite the economic situation.
However, on the shopping Sunday on January 28th in Berlin, the doors of KaDeWe remained closed, contrary to what was initially planned. The customers at the doors were not told the reasons.
In the event of self-administration insolvency, the management remains in office, but is assigned a so-called administrator from outside. The old management thus retains large parts of the power of disposal over the company. At the same time, the company is protected from enforcement and coercive measures by creditors. (dpa)