Germany's Galeria Karstadt department stores file for bankruptcy

German department store chain Galeria Karstadt Kaufhof (GKK) has filed for insolvency at the Essen District Court, the company announced on Tuesday.

Galeria is therefore looking for a new owner. Talks with potential investors have already begun and the aim is to continue Galeria's operations.

Galeria chief executive Olivier van den Bossche said: "Galeria's operational success is burdened by the framework conditions of the old ownership structure. We expressly see today as a liberating blow."

The press release continues: "The insolvencies of the Signa Group are massively damaging Galeria, hampering ongoing business and severely restricting future development opportunities due to high rents and expensive services."

This is the third insolvency for GKK in less than four years. It was preceded by the instability of the parent company Signa.

In recent weeks, several companies from Austrian entrepreneur René Benko's retail and property group filed for insolvency - including Signa Retail Selection AG, to which GKK belongs.

It had announced at the end of November that it would wind up its business in an organized manner, which meant selling GKK.

Signa consists of a complex network of corporations with hundreds of individual companies.

Department stores in Germany, like in much of the rest of the world, have struggled in recent years in the face of intense competition from big-box discount retailers and online merchants like Amazon.