Getty Images / Michael Gottschalk, Collage: Business Insider
Under the rule of the Signa group and its founder René Benko, Galeria Karstadt Kaufhof (GKK) paid horrendous rents for the locations that were owned by the Austrian billionaire. Now both Signa and GKK are in bankruptcy, and the administrators on both sides have now negotiated new rental agreements. GKK administrator Stefan Denkhaus has apparently also successfully negotiated with other site owners. Our research shows that, according to the current status of negotiations, the department store chain will pay at least 60 million euros less rent per year.
The department store group Galeria Karstadt Kaufhof paid significantly excessive rents for years, and in some locations the rent was even horrendous. In Cologne it was more than 30 percent of sales; around ten percent is normal in the industry. Numerous GKK locations struggled to become profitable. Locations that were owned by the parent company Signa, in particular, earned a lot in terms of rent.
Both Signa and GKK are now insolvent, and the administrators of both companies have negotiated the rental agreements. GKK administrator Stefan Denkhaus also spoke to other site owners about the rent. Several insiders report that Denkhaus was successful: According to the current status of negotiations, the department store chain will pay more than 60 million euros less in rent per year. According to insiders, the department store chain finally has a good chance of operating profitably.
Galeria paid a total of 437 million euros in rental costs in 2022/23
Internal documents that we have show that GKK had to pay rental expenses totaling 394 million euros and additional rental costs totaling 43 million euros in 2022/23. A total of 437 million euros went towards rental costs. Now a seventh of the costs will be eliminated as a result of the negotiated reduction. Some savings will also be made by closing just over a dozen branches. More than 75 of the 92 shops will be retained. Insiders say that up to 80 could possibly remain open at the moment, but negotiations are still ongoing.
We sent Galeria Karstadt Kaufhof and the insolvency administrator Denkhaus a list of questions on the subject. A spokesman says that they generally do not comment on speculation.