Insolvency administrator Stefan Denkhaus, Bernd Beetz, CEO Galeria Olivier Van den Bossche, and press spokesman Stefan Hartwig (lr) stand at Galeria Kaufhof’s press conference about the result of the bidding process for Galeria Karstadt Kaufhof. dpa
A consortium led by former Galeria Kaufhof supervisory board Bernd Beetz and former Kaufhof owner Richard Baker has won the contract for the ailing department store chain Galeria Karstadt Kaufhof. However, our research shows that Beetz invests less than ten million euros in the department store chain, while Baker only invests a mid-double-digit million amount, which is also financed by debt. Previous owner Benko wanted to invest 200 million euros last year. In addition, creditors should only receive a three percent quota of their claims. We sent Beetz, Baker and the insolvency administrator a list of questions. The insolvency administrator replies: “No comment”.
There was great excitement last week when Galeria Karstadt Kaufhof’s new investors were presented at the department store chain’s Essen headquarters. Television, radio and newspapers from all over Germany and Austria were there. A beaming Bernd Beetz announced that he believed in the future of the department store and wanted to throw himself into the work. The former chairman of the supervisory board of Galeria Kaufhof took over GKK together with billionaire Richard Baker – and received advance praise.
Nothing is known yet about the purchase price, but something else is known: Our research shows that Beetz himself is investing less than ten million euros in the department store chain. His co-investor Richard Baker is said to be investing a mid-double-digit million amount, although not from his own wallet, but through banks. Baker had already been the owner of Galeria Kaufhof for several years and even then did not invest his own money, but rather organized financing through banks, which may have been cheaper for him in the end. Insiders report that he paid off the loans and interest through increased rents that Kaufhof had to pay at the time. The properties in which the Kaufhof stores were located belonged to Baker at the time.
Baker and Beetz are investing a quarter of what Benko pledged last year
For comparison: During the second insolvency of Galeria Karstadt Kaufhof, the former owner René Benko pledged 200 million euros to invest in the renovation of the department store, marketing campaigns, renovation of the branches and the expansion of the digital business and many other construction sites at GKK. The new owners are only taking over more than 70 branches instead of the previous 92, but are investing just a quarter of the amount that Benko had promised.
Branches that may not currently be taken over are primarily located in Signa properties where the rent and sales do not have a good relationship. The construction sites at Galeria Kaufhof are otherwise the same as they were a year ago, numerous managers unanimously report, and the investment requirement is correspondingly high. Both the company and the employees are disappointed by the amount of investment – and at the same time relieved that the two want to continue operating at least 70 branches.
We sent Bernd Beetz and Richard Baker questions about the facts. Those close to Baker say that they cannot comment on the figures due to confidentiality obligations in the course of the bankruptcy. Beetz left the list of questions unanswered.
The investment amount was of secondary importance for Denkhaus; branches were crucial
Insolvency administrator Stefan Denkhaus made it clear last week at the presentation of the new investors that the decisive criterion for him in awarding the contract to Beetz and Baker was their promise to take over at least 70 branches. According to our information, the investment sums that Beetz and Baker want to pay were of secondary importance to the insolvency administrator.
After all, the new investors find a company with a bulging cash register. According to our information, GKK’s liquidity is currently around 400 million euros. At the end of December, shortly before bankruptcy was filed, liquidity was still around 200 million euros, according to internal documents we have available. There are currently two main reasons for the bulging cash register: During the insolvency proceedings, the department store chain is withholding the sales tax that it would otherwise have to pay. The employment agency also pays the employees’ salaries. As a result, Galeria Karstadt Kaufhof built up a good cushion. The company had hardly any debts at the time of bankruptcy.
However, the bankruptcy had a recovery effect for the department store. However, there is a rather bitter pill for the creditors: several insiders unanimously report that they only receive a quota of three percent on their original claim. The usual rate for such procedures in Germany is around five percent. We confronted the insolvency administrator with the facts, his answer: “No comment”.