Department store chain Galeria Karstadt Kaufhof, with a total of 172 city-centre locations in Europe, has announced plans to close more than a third of its shops.
The Cologne-headquartered group, which is majority-controlled by Austria's Signa Holding, filed for insolvency at the beginning of April, and is currently under creditor protection.
The German United Services Trade Union (Verdi) announced on 19 June that the company would now close 62 stores, in a move which is likely to affect some 6,000 employees.
Galeria Karstadt Kaufhof was formed from the merger of Karstadt and Kaufhof in September 2018. However, retail headwinds in the past few years have been compounded by the recent coronavirus crisis. Many stores remained closed during lockdown protocols, further increasing pressure on group operations.
In Germany, stores exceeding 800 m2 of space were initially prevented from reopening in the first post-lockdown phase. Galeria Karstadt Kaufhof stores are typically larger than this, depressing second-quarter earnings still further.
The nature of the company's merger meant that Karstadt and Kaufhof stores are often found in close proximity, with the latest closures aiming to strategically restructure the group's footprint.
However, an initial plan to close up to 80 stores has now been reduced to 62 shops.
At the end of April, media reports suggested that US group Apollo Global Management was closing in on a portfolio of 17 Galeria Karstadt Kaufhof stores.
Bloomberg said that a fund managed by Apollo has emerged ahead of at least two other bidders in the run to acquire the properties for some €700 mln.
The deal had already received the green light from the German antitrust authority.
