KaDeWe Group files for insolvency
- 29 Jan 2024 3:31 pm CET
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The KaDeWe Group with the luxury department stores KaDeWe in Berlin, Oberpollinger in Munich and Alsterhaus in Hamburg has filed for insolvency. However, the stores will continue to operate. The insolvency had become apparent after several media houses had speculated about it.
Insolvency proceedings under self-administration have been applied for, as KaDeWe announced on Monday. The retail group emphasized that the rents at the three locations were a particular burden on the business. They made "sustainable, profitable operations almost impossible". The Lamarr department store in Vienna, which is still under construction, is also part of the insolvency.
Companies that have good prospects of continuing their business operations usually apply for insolvency under self-administration instead of with the help of an insolvency administrator. It is a variant of insolvency law that aims to restructure a company instead of winding it up. The company remains protected from enforcement and coercive measures by creditors.
Future of Globus still open
The insolvency of the KaDeWe Group comes just a few weeks after the Signa network of companies owned by Austrian investor René Benko got into difficulties. 49.9 percent is owned by Signa Retail, which also owns Galeria Karstadt Kaufhof. Signa Retail announced at the end of November that it would wind up its business in an orderly manner. Galeria Karstadt Kaufhof filed for insolvency proceedings three weeks ago.
The remaining 50.1 percent of the KaDeWe Group is owned by the Thai conglomerate Central Group of the billionaire Chirathivat family. A similar ownership structure applies to the Swiss department store chain Globus, which Signa and the Central Group bought from Migros in 2020. It is still unclear what the future holds for the Globus Group.
With regard to the future of Globus, the Central Group is not giving any details. "The insolvency filing of KaDeWe has no direct impact on the operations, financial stability or survival of other companies in our European portfolio," the Thai company stated when asked by AWP.
The KaDeWe Group is facing very specific challenges such as very high rents that are above market prices, the Central Group writes further. Towards the end of 2023, the Group reaffirmed its support for the European luxury department store business.
Rents too high
"However, the index-linked rents are disproportionately high, they are not in line with the market - and are set to rise further," KaDeWe Managing Director Michael Perseim also criticized on Monday. Numerous discussions with the landlord have not changed this. The KaDeWe Group is the operator of the traditional department stores in Berlin, Hamburg and Munich. René Benko is its landlord via Signa.
"Operationally, we are doing an outstanding job. All stores are recording rising sales even in difficult economic times," Peterseim continued according to the press release. In the 2022/2023 financial year, sales of almost 728 million euros were generated - an increase of almost 24% compared to the pre-corona financial year 2018/2019.
The Group employs around 900 people at KaDeWe in Berlin. In addition, there are around 200 employees at Alsterhaus, 300 at Oberpollinger and a further 300 employees at the Berlin headquarters.