NRDC Equity Partners, a New York-based investment firm, alongside investment firm BB Kapital SA, Bernd Beetz’s family office, are buying Galeria Karstadt Kaufhof GmbH in Germany.
The consortium is pursuing the takeover and financing of Galeria as part of an insolvency plan linked to the demise of former owner, Signa.
Insolvency administrator of Galeria Karstadt Kaufhof, lawyer Stefan Denkhaus of the firm Boege Rohde Luebbehuesen (BRL), intends to submit the plan to the Essen District Court at the end of April; the creditors' meeting is expected to vote on it in late May.
Denkhaus said: ‘We have been negotiating intensively with two potential investors, and, together with the creditors' committee, we have selected two investment firms, BB Kapital SA and NRDC Equity Partners. The consortium convinced us with its entrepreneurial courage, a sustainable economic concept, and proven financial solidity.’
This acquisition is anchored in Bernd Beetz’s decades of experience solidifying and scaling German retail brands alongside NRDC Equity Partners’ history of successful long-term investments.
Bernd Beetz explained: ‘We are extremely glad that we found unanimous support for our long-term plan. We believe in the future of Galeria, and we have only one focus: invest, develop, and grow the department stores. The next few weeks are crucial to establishing the prerequisites for a sound business case in place. Once these requirements are achieved, we are confident we will turn around Galeria and set it on a successful course.’
Jack Baker, founding partner, NRDC Equity Partners, said Galeria was ‘more than just a department store’.
‘It is an iconic brand in the shared experience of all Germans who deserve owners ready to operate it as a whole.
Galeria announced its insolvency in January 2024 following an effort to restructure its business and commitments. One of the key pillars of the future concept is the consistent local focus as a department store, which has been successfully expanded since summer 2023.
‘Three months ago, we set in motion a plan to secure the future of Galeria Karstadt Kaufhof by filing for insolvency proceedings,” said Olivier van den Bossche, CEO of Galeria Karstadt Kaufhof. ‘The aim was to achieve a disengagement from the old structure through a change of ownership. We wanted to keep Galeria as a whole competitive and continue the strategy of consistent local orientation. Today, we are decisively closer to this goal. This is the natural next step to protect and extend the future of Galeria. I fully support this acquisition, the investors, and the next stage for this great company.’
As part of the deal structure emerging from insolvency, Denkhaus will retain company oversight, most likely until the end of July 2024, – after approval by the creditors' meeting – at which time full control of the company will transfer to NRDC Equity Partners and BB Kapital SA with Bernd Beetz as designated executive chairman of Galeria. The agreement stipulates that the German-American investor consortium receives Galeria as a whole and is expected to take over more than 70 shops Germany-wide.
Bernd Beetz, the former CEO of Coty Inc. and former Galeria supervisory board member, brings extensive knowledge of the German landscape, the retail industry, and Galeria to this venture, the new owners said in a statement. Under his leadership, Coty’s revenues almost quadrupled from $1.3 bn to $4.7 bn during this period. Before joining Coty - also as an entrepreneur - Beetz was responsible for the Christian Dior fashion perfume and cosmetics division worldwide at LVMH Moët Hennessy Louis Vuitton. Before that, Beetz spent 20 years in various management positions at Procter and Gamble (P&G) in Germany, Switzerland, Italy, and Turkey.
As many rental agreements are still being negotiated by the insolvency administrator and the Galeria management, the decision as to the number of shops to be taken over will be determined at the end of April. The company’s head office will also be changed to reflect the reduced size of department stores, with the aim of managing Galeria like a medium-sized company.
NRDC Equity Partners was advised by Robert Rizzo, Britta Grauke, and Christian Tappeiner at Weil, Gotshal & Manges in New York and Frankfurt. BB Kapital SA was advised by Matthias Lupp and Stefan Jörgens of Lupp + Partner.
Karstadt Warenhaus GmbH, based in Essen, is a German department store chain. The two companies GALERIA Kaufhof GmbH and Karstadt Warenhaus GmbH have been working closely together since November 2018. From March 2019, Karstadt and Kaufhof appeared under the joint name GALERIA Karstadt Kaufhof.
In January 2020, the two companies were merged into one company.
