What: Galeria in Germany is set to close 16 stores out of 92, including 3 in Belin alone.

Why it is important: Rightsizing of the German market is taking place. Does this mean that department stores in Germany only stand a chance in Luxury now that mid market is a failure?

Galeria Karstadt Kaufhof, facing insolvency, has confirmed the closure of 16 of its 92 department stores across Germany. The stores slated for closure by August 31 include locations in Augsburg, multiple Berlin sites (Ringcenter, Spandau, Tempelhof), Chemnitz, Essen, Cologne Breite Straße, Leonberg, Mainz, Mannheim, Oldenburg, Regensburg Neupfarrplatz, Trier Fleischstraße, Würzburg, and Wesel. This decision leaves approximately 11,400 of the company’s 12,800 employees with secured jobs, but results in around 1,400 layoffs, with nearly a third from the corporate headquarters in Essen.

Amidst this turmoil, Galeria Karstadt Kaufhof has been undergoing ownership changes, with a consortium led by US investment firm NRDC and BB Kapital SA planning to acquire the chain. The insolvency plan, set to be finalized by the end of April, will be put to a vote by creditors on May 28, requiring approval to become legally binding. If accepted, the plan will see the company transition to its new owners by the end of July. This development follows the retailer's third bankruptcy in just over three years, primarily attributed to financial instability within the previous owner Signa Group's operations.

Galeria Karstadt Kaufhof to close 16 stores out of 92