Germany's last department store chain is to get new owners after its latest insolvency

BERLIN (AP) — Germany's only remaining major department store chain is set to get new owners after its third spell in bankruptcy protection in four years, and the company aims to keep most of its stores open, its insolvency administrator said Wednesday.

Galeria Karstadt Kaufhof is to be taken over by a consortium of U.S. private equity firm NRDC Equity Partners, which currently has investments in Hudson's Bay of Canada and Saks Fifth Avenue among others, and German businessman Bernd Beetz's BB Kapital SA.

The deal is still contingent on a court in Essen and Galeria's creditors, who are due to meet May 28, approving the plan. Financial details weren't immediately available.

Insolvency administrator Stefan Denkhaus said the intention is to hold on to more than 70 of the chain's current 92 branches, German news agency dpa reported. He said that would make it possible to preserve most of the company's 12,800 jobs.

Galeria Karstadt Kaufhof made its most recent insolvency filing in January following similar filings by several companies in the trading and real estate group of Austrian businessman Rene Benko — including Signal Retail Selection, Galeria’s owner.

Galeria is the result of a merger a few years ago of rivals Karstadt and Kaufhof.

It has already been through two rounds of store closures, the last of which was completed in January, since seeking protection during the first lockdown of the coronavirus pandemic in April 2020. In October 2022, it again sought protection from creditors, citing a steep rise in energy prices, high inflation and weak consumer spending.

Beetz said at a news conference in Essen that the prospective new owners “want to invest, develop and grow in the long term.”