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Retail: Galeria still behind on rent for some stores
🇩🇪 Germany /Economy & Trade

Retail: Galeria still behind on rent for some stores

From Die Zeit · () German

Translated from German, summarized and contextualized by DistantNews.

At a glance

News From a news agency Ongoing story
  • German department store chain Galeria remains in arrears with rent payments for several of its locations, including the Berlin Alexanderplatz store.
  • Property owner Commerz Real is seeking a solution but also exploring alternatives, urging Galeria to invest more in its operations and modernization.
  • The company, which operates 83 stores and employs 12,000 people, is reportedly in talks for a new large loan, and further store closures are possible.

The German department store chain Galeria is facing continued financial difficulties, with reports indicating ongoing delays in rent payments for several of its branches. Notably, the store located at Berlin's Alexanderplatz is among those affected, with rent for March and April reportedly not fully paid, and May's rent still outstanding.

Commerz Real, the owner of the Alexanderplatz property, confirmed the payment delays and stated they are actively seeking a resolution while simultaneously exploring alternative options. The company has called on Galeria's owners to increase their commitment to operational responsibilities, including essential maintenance and necessary renovations. Commerz Real expects significant strategic investments to modernize Galeria's retail concept.

The rent for April and also for March has not yet been fully paid, the rent for May is still outstanding for Galeria.

— Commerz Real spokespersonConfirming rent payment delays for the Berlin Alexanderplatz location.

This situation follows a recent agreement in February to extend the usage agreement for the Berlin Alexanderplatz location until March 2027. Another landlord confirmed that Galeria had failed to pay rent for April and May. While the company declined to comment on ongoing negotiations with contractual partners, it did not deny the allegations. Previously, Galeria had cited liquidity fluctuations and requested rent deferrals, which were not universally accepted.

We are striving for a solution, but are also exploring alternatives.

— Commerz Real spokespersonDescribing the company's approach to the situation.

Galeria, which employs approximately 12,000 people across 83 stores, is reportedly in discussions for a substantial new loan. The company's retail network may shrink further, as it had announced in March plans to renegotiate lease agreements for eight locations, not ruling out closures. These include stores in Munich, Berlin (Kurfürstendamm, Hermannplatz), Cologne, Mannheim, Braunschweig, and Aschaffenburg, with the strained urban retail environment cited as the reason.

Galeria filed for insolvency for the third time in four years in early 2024, attributed to the financial instability of its parent company Signa and high rental costs. Following the closure of nine locations in summer 2024, the chain is now owned by US investment firm NRDC and a company associated with entrepreneur Bernd Beetz.

We expect significant strategic investments in the modernization of the retail concept.

— Commerz Real spokespersonStating expectations for Galeria's owners.
DistantNews Editorial

Originally published by Die Zeit in German. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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