Economy

Galeria Karstadt Kaufhof: 80 branches and up to 5,000 jobs before the end

Caroline Seidel / picture alliance via Getty Images

Galeria Karstadt Kaufhof wants to close up to 80 of the 175 branches in Germany, the “Wirtschaftswoche” reported.

This could close almost half of all Karstadt and Kaufhof branches and thousands of employees lose their jobs.

The business magazine refers to corporate circles. You are talking about a reorganization concept that was presented to the company’s general works council today.

Galeria Karstadt Kaufhof could close almost half of the 175 branches. The “Wirtschaftswoche” reports on Friday. This emerges from a reorganization concept that was presented to the company’s general works council today, the magazine writes. According to this, the employee representatives assume that up to 80 locations in Germany could be closed. Insiders estimate that this means a cut of up to 5,000 jobs, writes the business magazine.

The Verdi union wrote in a message that 10 percent of the jobs should be cut. “This is brutal! It seems that the company management and the owner are misusing the corona crisis in order to still implement their original plans for site closures and layoffs, ”throws Stefanie Nutzberger, the trade executive board member of the United Services Union (Ver.di) , the retail group.
Even before Christmas, the group had guaranteed the future for the department store and thus also a location and job security in the collective agreement. “A few weeks later, the turnaround and a clear cut come at the expense of the workers. Implementing this planning would have a devastating impact on the approximately 35,000 employees at Galeria Karstadt Kaufhof and in the group, ”said Benefitberger. Employees at Karstadt Feinkost, Karstadt Sports, the catering trade with Dinea and Le Buffet and the logistics area are also affected.

In a press release by the General Works Council of Galeria Karstadt Kaufhof, it said: “The cruelty measures in the draft of the restructuring plan are hard to beat and a general attack on all employees.”

At the end of April, Galeria Karstadt Kaufhof said that locations are currently being analyzed for their economic efficiency and the respective landlords are being contacted. The group wanted to reduce the rents of its branches. Therefore, the accommodation of the individual landlords should play a role, which branches are closed.

Frank Kebekus, the court-appointed administrator and the general representative Arndt Geiwitz had already indicated that the “restoration ahead of us must be far more determined” than “we would like it to be”. The management also wrote that “unfortunately there must also be site closures and, accordingly, job cuts”, wrote “Manager Magazin”.

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The corona crisis is causing great difficulties for the department store chain, which is already under pressure. There were already losses before, but the group lost around 80 million euros in sales per week during the closure of the branches. By the end of April, the deficit had grown to more than half a billion euros, and the company management is expecting a drop in sales of up to one billion euros overall.

Numerous jobs are at stake

Many of the approximately 28,000 employees will have to leave the company, wrote “Manager Magazin” at the end of April. Also, that Verdi had the inventory of all, including the unprofitable branches, fixed in a collective agreement until 2024 at the end of December, should no longer help.

The company, which belongs to the Signa group of the Austrian billionaire René Benko, already fled under the protection of the federal government because of the Corona crisis. According to “Manager Magazin”, Signa recently invested around 500 million euros in the merger of Karstadt and Galeria Kaufhof. Benko is said to have recently injected another 140 million euros.

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