For the second time in two years, majority investor René Benko – the young Austrian entrepreneur controlling the Signa Holding, which holds 100 percent of the shares in Galeria Kaufhof since June 2019 – has filed for protective insolvency proceedings for his Galeria Karstadt Kaufhof (GKK) department store chain. He wants to close a third of the 131 stores in Germany. This is despite the fact that the chain has already collected €680 million in taxpayers’ money from the German economic stabilization fund. At the end of November and beginning of December, the management of the Galeria department store chain met with the Federal Collective Bargaining Commission (BTK) of the ver.di trade union to discuss the future of the company – the first time since the surprise application for another protective shield procedure on Oct. 31. With the second insolvency in self-administration within two years, Galeria’s management has triggered massive fears for the future among its approximately 17,000 employees.
In a press conference, ver.di chairman Frank Werneke announced the union’s full commitment: “We are fighting with the employees to preserve the locations and the more than 17,000 jobs. It’s also about the attractiveness of many city centers because the GKK locations form an anchor point for other stores, retail and service companies in many places.” He also reiterated ver.di’s demand for co-determination in further insolvency proceedings: “We demand to be represented in the creditors’ committee in order to be able to effectively represent the interests of the employees, who have already invested considerable collective bargaining components in the restructuring.” The focus must now be on securing the future of the 131 branches. Galeria has a motivated workforce, and politicians are called upon to take action. According to ver.di, the department store is not dead; it just needs to be realigned.
It is currently unknown what Benko will say about the situation – he still seems to have gone into hiding for the time being. In Austria, he is facing accusations of bribery, and his offices have already been searched. With outside money and other deals, he has reportedly amassed an estimated fortune of €4.6 billion.
