German Cities Demand Say in Galeria Store Closures Amid Insolvency Fears

Germany's Association of Cities (Städtetag) is calling for municipal involvement in decisions regarding the future of the struggling department store chain Galeria Karstadt Kaufhof. The association fears a "downward spiral" in German city centers if numerous stores are closed.

Christian Schuchardt, the general manager of the Städtetag, told the Funke Mediengruppe newspapers that involving local communities has proven effective in finding tailored solutions for both locations and employees in the past. Galeria announced this week that it is examining 33 of its 83 stores for profitability, with potential closures looming. The company plans to negotiate lease terms and space adjustments with landlords.

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In the past, it has proven effective to find suitable and individual solutions for the locations and for the employees.

Schuchardt urged for swift and coherent concepts for the redevelopment of sites where stores might close, warning of negative consequences for affected downtown areas. He emphasized that each location faces unique challenges.

The department store group, which employs around 12,000 people, filed for insolvency for the third time in four years in early 2024. Financial instability at its parent company, Signa, was a contributing factor. Nine locations were closed in the summer of 2024. Galeria is now owned by US investment firm NRDC and Bernd Beetz's company. Despite securing a new credit line of up to 160 million euros from Gordon Brothers, the chain's future remains uncertain.

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Otherwise, a 'downward spiral' threatens the affected city centers.