Iconic German department store group KaDeWe files for bankruptcy
The owner of several of Germany's most iconic high-end department stores, including the KaDeWe in Berlin, the Oberpollinger in Munich and the Alsterhaus in Hamburg, has filed for bankruptcy.
The KaDeWe Group told dpa on Monday that the company's stores will remain open. The group applied for restructuring under self-administration, a type of bankruptcy filing more typical for companies with good prospects of continuing business operations.
The retail company contended that the rents at the three flagship locations were a particular burden on the business and made "sustainable, profitable operations almost impossible."
The majority stake of 50.1% in the KaDeWe is held by the Bangkok-based Central Group, a conglomerate owned by Thailand's Chirathivat family.
The other 49.9% is owned by Signa Retail, the subsidiary of Austrian real estate mogul René Benko's troubled and insolvent Signa empire, which has been mired in deep financial trouble and is currently in bankruptcy proceedings in several European countries.
Signa Retail also owns the bankrupt German department store chain Galeria Karstadt Kaufhof, which filed for bankruptcy three weeks ago and is urgently seeking new owners.
KaDeWe Managing Director Michael Peterseim expressed confidence in last November that the luxury retailer would escape the growing crisis at Signa, which is also the chain's landlord.
"Operationally, we are doing an outstanding job. All properties are recording rising sales even in difficult economic times," he said, although he complained that indexed rents for KaDeWe's stores are "diproportionately high" and "not in line with the market."
According to Monday's announcement, the KaDeWe Group generated sales of almost €728 million in the 2022/2023 financial year, an increase of almost 24% compared to 2018/2019.
The company said it employs around 900 people at KaDeWe in Berlin, around 200 people at Alsterhaus in Hamburg, around 300 people at Oberpollinger in Munich and another 300 people at the company's Berlin headquarters.
The head of retail consultancy BBE, Johannes Berentzen, estimated that rents for the KaDeWe Group amount to 13% to 20% of store turnover, depending on the location.
"For the majority shareholder Central, insolvency could be worthwhile in order to get out of the expensive rental agreements," said Berentzen.
"I am certain that all three stores will continue to operate," he said, stressing that luxury retail continues to perform well despite broader trouble in the economy.
