Germany's last major department store chain, Galeria Karstadt Kaufhof (GKK), gets another chance. The creditors' meeting of the department store group approved on Monday the insolvency plan developed by the restructuring expert Arndt Geiwitz and the company's management to save the traditional company, as the company reported.

"The restructuring plan and thus the concept of the department store of the future give Galeria Karstadt Kaufhof the best chance of getting back on the road to success," said Geiwitz. It is now crucial that the concept is implemented quickly and consistently by the management and the owners. The trustee Frank Kebekus emphasized that a rejection of the insolvency plan would have had catastrophic consequences for the group. Then, according to him, the closure of all branches and the termination of all employees would have been unavoidable.

Creditors and employees lose out

For the creditors, however, the step means giving up a large part of the money that the department store group still owes them. Overall, according to media reports, suppliers, landlords and other creditors have to forego more than one billion euros. For more than 4,000 of the approximately 17,000 employees, the planned closure of 47 branches means the loss of their jobs. The job cuts not only affect the closing branches, but also the group headquarters in Essen and the remaining department stores. Because many of them are to be downsized. On the fringes of the creditors' meeting, around 20 Galeria works councils from all over Germany demonstrated against further victims of the employees.

Despite the high financial losses, the creditors had little choice but to approve the plan. Because if the insolvency plan had been rejected, they would probably not have seen any of their money at all. If they continue, on the other hand - also thanks to a grant worth millions from GKK owner René Benko - they can expect at least a small part of their claims to be paid.

At the end of last year, Galeria Karstadt Kaufhof sought rescue in a protective shield procedure for the second time in three years. The group cited the consequences of the corona pandemic and the Ukraine war as reasons for this.

A first protective shield procedure, which was initiated 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.