Germany's last major department store group, Galeria Karstadt Kaufhof, intends to close 52 of the remaining 129 department stores, according to the general works council. "In total, well over 5,000 employees will lose their jobs," the company's employee representatives reported on Monday. "This is a pitch-black day," emphasized the works council.

The background: Galeria Karstadt Kaufhof had to seek rescue in protective shield insolvency proceedings for the second time in less than three years at the end of October. In a letter to employees at the time, CEO Miguel Müllenbach cited the exploding energy prices and the slump in consumption in Germany as the reason for the company's threatening situation. From the start, the manager left no doubt that the renewed restructuring would involve significant cuts in the branch network and significant job cuts.

It is already the second attempt to get the retail giant back on the road to success with a protective shield procedure and the associated haircut. A first attempt, which started in 2020 during the first corona lockdown, brought only temporary relief to the company, despite the closure of around 40 branches, the loss of around 4,000 jobs and the cancellation of more than two billion euros in debt.

At the beginning of 2021 and again at the beginning of 2022, the shrunken retail giant had to ask for state support in view of the pandemic. Overall, the Economic Stabilization Fund (WSF) helped the traditional company in two aid campaigns with 680 million euros - without success.

The Galeria general representative Arndt Geiwitz, who had already accompanied the first protective shield procedure as a restructuring expert, was recently confident that thanks to the second protective shield procedure there was still a perspective for the department store group. "I am convinced that the Galeria department stores have a future, even if not in their current form," emphasized the renovator in an interview. However, the retail giant would have to become smaller and more decentralized for this. Galeria will hopefully make a profit again "in three calendar years". Before that, further losses were certainly incurred due to the restructuring costs, for example for conversions.

Editor's Note: This article has been updated since it was first published.