What: New ownership plans to invest up to 100 million euros in modernizing Galeria Karstadt Kaufhof department stores.

Why it is important: This investment is pivotal for revitalizing Galeria Karstadt Kaufhof after it faced financial challenges leading to bankruptcy. The modernization plan aims to make the stores more competitive and appealing to customers, reflecting a significant commitment to the department store's future and the potential for economic and employment stability.

The consortium consisting of NRDC and BB Kapital SA, the new owners of Galeria Karstadt Kaufhof, intends to invest up to 100 million euros over the next two to three years to modernize its department stores. This investment follows the closure of 16 stores and is part of broader insolvency proceedings. The previous owner, René Benko, had pledged a more substantial investment which did not materialize due to financial troubles, leading to multiple bankruptcies for Galeria. Retail expert Carsten Kortum highlighted a severe backlog in investment, estimating that about one billion euros are necessary to modernize all remaining stores adequately. The completion of the takeover and the initiation of the modernization efforts hinge on creditor approval of the insolvency plan and subsequent court confirmation, with a deadline set for the end of July.

Galeria: What modernization may cost