Galeria Karstadt Kaufhof — one of Europe’s largest and oldest department store chains — has been struggling for several years. Now, those financial problems will result in the closures of 52 of the chain’s 129 stores, along with as many as 5,000 job losses.

The Galeria Karstadt Kaufhof chain has filed for a form of bankruptcy twice already. In April 2020, it filed for what is known in Germany as protective administrative insolvency, a version of the U.S.’s Chapter 11 proceedings. Then in November 2022, it did the same again.

In 2018, Germany’s last big department store chain had employed around 30,000 people. But after the 2020 declaration, 40 locations were closed and ever since then, the company has been threatening to shutter more.

This week, the company said in a statement that as part of the restructuring that the last bankruptcy filing required, 52 further locations would be closing. The closures will happen in two tranches, with 21 closing in June and the rest shutting for good in January next year.

The company employs around 17,400 people altogether and the closures will mean between 4,300 and 5,000 job losses, from within the stores themselves and in various management divisions.

Galeria Karstadt Kaufhof managers have blamed the COVID-19 pandemic, the war in Ukraine, rising inflation and energy prices as well as uncertain consumer sentiment for the chain’s woes.

The secretary general of the German Retail Federation, Stefan Genth, told local media this was just another sign of how badly all of the country’s retailers were faring after the pandemic. He noted that 41,000 retailers had closed down since 2019.

However, Verdi, the large German union that represents retail staff, has been more critical, accusing the company of not having a good enough management strategy to cope with the changed circumstances and demanding new management. Galeria Karstadt Kaufhof is owned by the real estate and trading company Signa Holding, which is headed by wealthy Austrian entrepreneur René Benko. 

The company also received 680 million euros in state aid during the pandemic.

In its statement, Galeria Karstadt Kaufhof said it would keep 77 of its current stores open and that all of these will be modernized within the next three years. The plan is to give local store management more of a say in order to better cater to each location’s customers. The company also plans to focus more on fashion, beauty and homewares.

The planned closures still need to be finalized at a meeting of the company’s creditors on March 27.

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