An investment consortium is set to invest up €100 million over the next 3 years to rescue Germany’s bankrupt Galeria Karstadt Kaufhof chain of department stores.
The chain’s insolvency plans currently include the shuttering of 16 of its 92 outlets.
The consortium, comprising US private equity firm NRDC and BB Kapital SA, an investment vehicle belonging to German entrepreneur Bernd Beetz, has taken on the task of restructuring a business undergoing its third bankruptcy in less than 4 years.
René Benko, the Austrian businessman who was formerly the owner of Galeria, pledged €200 million to restructure the chain in 2023. However, he has so far not followed through on his stated intentions – which in turn led to Galeria’s declaration of bankruptcy in January.
German commerce expert Carsten Kortum believes that an investment of at least €1 billion is needed to rescue the chain. In his analysis, he noted that only 10 Galeria stores have been modernized, with an average of €20 million needed for each of the remaining 66.
The takeover by NRDC and Beetz will be concluded only if creditors accept the insolvency plan by May 28 and this is confirmed by the courts. Administrator Stefan Denkhaus is aiming to transfer ownership by the end of July.