Germany’s last major department store chain Galeria has dropped Karstadt and Kaufhof from its company name, marking the end of an era and the beginning of a new chapter under new ownership.
The end of Karstadt and Kaufhof
As of August 1, the Essen District Court has lifted the insolvency proceedings that began in January, enabling a fresh start for the struggling company and a change in its name. For more than five years, the chain had been known as Galeria Karstadt Kaufhof, a result of the 2018 merger between former rivals Kaufhof and Karstadt. From March 2019, they operated under this joint name. Now, that era has come to an end: the company will henceforth be known simply as Galeria.
This change marks the conclusion of a significant chapter in German business history. Rudolph Karstadt opened his first store on May 14, 1881, in Wismar. The second Karstadt store followed three years later in Lübeck. In the following years, more and more were added. By early 2009, there were a total of 90 Karstadt branches in Germany.
The Kaufhof name is also familiar to most Germans. This department store chain was established in 1879 in Stralsund, originally as Leonhard Tietz AG. After significant expansion with its own production sites and around 50 branches, the company was first renamed Westdeutsche Kaufhof AG and, after World War II, Kaufhof Warenhaus AG. It wasn’t until 2008 that the company was named Galeria Kaufhof GmbH. Before the merger with Karstadt, there were 96 branches.
New ownership and future plans
Also effective August 1, the company has new owners. It now belongs to a consortium led by Mannheim entrepreneur Bernd Beetz and US investor Richard Baker. Beetz promises a “new corporate culture.” The goal is “to make our branches more attractive, to reward performance more strongly, and to increase customer satisfaction.”
At the end of May, creditors had already approved the insolvency plan, paving the way for the restructuring and rescue of the retail giant. After seven months of insolvency proceedings, the department store group can now stand on its own feet again. The former insolvency administrator, Stefan Denkhaus, is optimistic, stating that the economic starting position is good: “We have succeeded in reducing the cost structure to an appropriate level in many areas,” says Denkhaus.
Downsizing and modernization
Galeria currently has 92 branches in Germany, but this number is set to decrease to 83 by early September. Just four years ago, there were more than twice as many at 171. At the beginning of the insolvency proceedings, 16 branches were on the list for closure. In the future, the company, which is also downsizing its headquarters and moving from Essen to Düsseldorf, will have around 12,000 employees nationwide.
Galeria CEO Olivier Van den Bossche is confident that his company has a good future ahead. He is focusing on concentrating on the core competency as a department store; the company has parted ways with the Galeria travel agencies. The remaining branches are to be modernized “to offer an attractive shopping atmosphere and an ideal shopping experience,” as Van den Bossche puts it.
