COVID-19 is ruining retail sector across the globe and now Galeria Karstadt Kaufhof, Germany’s biggest department store, has filed for administrative insolvency owing to the harsh impact of this pandemic. This administrative insolvency is similar to bankruptcy proceedings in the US.
The lockdown is causing a revenue loss of about €80 million per week to the company operating about 240 stores across Germany. The department store retailer employs more than 28,000 people in Germany who now fear for their future.
Just a few days back, Esprit granted protection from creditors in Germany; this fashion retailer was particularly concerned about liquidity problems, as sales had plummeted due to COVID-19.
René Benko’s Signa Group (parent organisation of the retailer) promises to make hundreds of millions of euros available as additional financing.
The company headquarters in Cologne said that a court in Essen has accepted the request. Under creditor protection, the company will be allowed to restructure, while its stores will remain closed to fight the spread of Coronavirus. Now, it can function independently, while working on a recovery plan.
Galeria Karstadt Kaufhof was considering to apply for German state bank KfW’s €500 billion liquidity programme, but did not succeed to do so in time.
Bharat Tex Special Report 2026 
