What: The German department store group will be closing 52 of its 129 stores with as many as 5,000 employees losing jobs.

Why it is important: The group is one of the largest and oldest department store chains in Europe and has been struggling for several years despite two insolvency filings and hundreds of millions in government aid.

The company said in a statement that as part of the restructuring that the last bankruptcy filing required, 52 further locations will be closing. The group will close 21 stores in June with the rest closing for good in January next year.

Currently, the group employs around 17,400 people and the closures will result in around 4,300 to 5,000 job losses from the stores to various management divisions.

Galeria Karstadt Kaufhof has struggled since 2020, following the COVID-19 pandemic, the war in Ukraine, rising inflation and energy prices as well as uncertain consumer sentiment.

The department store group will be keeping 77 of its current stores open, with plans to modernize these locations within the next three years. The company also plans to give local store management more of a say to better cater to each location’s customer and will also focus more on fashion, beauty, and homeware.

The planned closures still need to be finalized at a meeting of the company’s creditors set to take place on March 27.

Galeria Karstadt Kaufhof to close nearly half of all stores in next year