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ESSEN (dpa-AFX) – It was a pitch-black day for Galeria Karstadt Kaufhof and his employees: Germany’s last major department store group announced the closure of 62 of its 172 department stores on Friday. According to the General Works Council, a total of 5,317 employees will lose their jobs – and many city centers will be one of their most important attractions. The Verdi union had previously spoken of around 6,000 of the 28,000 employees still affected by the clearcut.
The ailing department store group plans to close branches in 47 cities. Six of the eleven existing department stores are to be closed in Berlin alone, four in Hamburg, three in Munich, two in Dortmund, Düsseldorf, Essen and Nuremberg. But it also affects many smaller municipalities such as Goslar, Lübeck or Worms. The Vice President of the German Association of Cities, Markus Lewe, said: “The massive closings of branches at Karstadt Kaufhof are a deep cut for the cities concerned. With these department stores, a place of supply and encounter is lost.”
In addition to the department stores and two bargain centers, 25 travel agencies will also be closed, according to the General Works Council. The fate of the Karstadt Sports stores is still open. Here, more than two thirds of the approximately 30 branches are considered to be at risk.
The management of Galeria Karstadt Kaufhof described the measures as inevitable. “We know what this means for the employees concerned. But this step is without an alternative, because these branches endanger the entire existence of the company,” said GKK representative Arndt Geiwitz. Ultimately, it is about securing Galeria Karstadt Kaufhof and many thousands of jobs. Originally, the management even wanted to close up to 80 stores.
Galeria Karstadt Kaufhof suffered a serious crisis due to the pandemic closure of all branches and had to seek rescue in a protective shield procedure in early April. Galeria Karstadt Kaufhof expects the pandemic and the economic downturn that it triggered to result in sales of up to 1.4 billion euros by the end of 2022.
However, the Verdi union still hopes to further reduce the number of closings. “We will do our utmost to preserve the locations and the future of the employees. The last word has not yet been said,” said Stefanie Nutzberger, a member of the Verdi federal executive board. For Saturday the general works council announced a demonstration of GKK employees in front of the Hamburg headquarters of the real estate giant ECE. The workers demand concessions on the rent from the group for the department store properties that it has rented.
The social plan and reconciliation of interests negotiated by the company with the general works council and the Verdi trade union provide, among other things, that the dismissed employees can switch to a transfer company for at least six months. The Austrian GKK owner René Benko made a million euros available for this, the general works council reported.
The union also considered it a success that the company originally planned to cut ten percent of the jobs in the remaining branches off the table. This saved around 1,000 jobs. In addition, the integration collective agreement agreed in December 2019 remains in force.
Federal Minister of Labor Hubertus Heil (SPD) asked Galeria Karstadt Kaufhof to refrain from layoffs during the renovation. Owners and creditors are obliged not to pursue “radical layoff plans” but to invest in the preservation of jobs and the future viability of the company.
In conversation with the German press agency, however, trade experts were unsure whether the cuts would really be enough to secure the future of the company. The trade expert Gerrit Heinemann from the Niederrhein University of Applied Sciences said: “Galeria Karstadt Kaufhof wants to continue with 110 department stores. However, most experts assume that only around 80 department store locations will survive in the long run. That should not be the end of the department store shrinkage There is still room for improvement down there. ” The group overslept the success of the online business. In this respect, it is no coincidence that the closure plans were announced on the day that Amazon turned 25.
The trade expert Thomas Rob from the Bonn-Rhein-Sieg University of Applied Sciences rated the extensive closings as a “sign of helplessness” and added: “Now they have cleared their air again. But how long that will take is a question.” / Rea / DP / fba