Why Galeria Keeps Sliding Into Insolvency — and What the Fourth Filing Means
Germany’s last major department store chain has filed for insolvency for the fourth time in six years. Galeria applied to the district court in Düsseldorf for the opening of insolvency proceedings. Operations at its 83 stores will continue for now, according to Tagesschau. Around 12,000 employees face uncertainty about their jobs and about whether they will receive insolvency pay. It is not yet known which locations must close.
The filing follows a decade of decline. Galeria’s earlier insolvencies came in 2020, 2022 and 2024. Creditors previously waived billions in claims to keep the chain alive. Roughly two and a half years ago, the company—then called Galeria Karstadt Kaufhof—filed for insolvency after its parent group Signa collapsed. Since summer 2024, Galeria has been owned by US investment firm NRDC and a holding company linked to entrepreneur Bernd Beetz.
So why is the chain back in court? The short-term trigger is a serious cash shortage. BILD reports that Galeria has only about 10 million euros in reserves, well below the 20 million thought necessary to keep daily operations running. Negotiations with US investor Gordon Brothers about fresh funding reportedly failed. That comes after Gordon Brothers extended a rescue loan of 160 million euros in June. The money is already spent, and September salaries could only be paid with difficulty, according to BILD.
Deeper forces are at work too. Sales have been sliding sharply. BILD cites company sources saying department stores sold about 15 percent less than a year earlier across recent months, with September down around 25 percent. Online competition, high rents and cautious consumer spending have squeezed the entire sector. The numbers are stark: according to the EHI retail research institute, department stores’ market share in German retail fell from 4.2 percent in 2020 to 1.2 percent most recently.
Galeria’s previous restructuring plans have not stopped that slide. In July, the company said it would review 33 stores and renegotiate rents with landlords. Now insolvency is being used as a more forceful reset. According to company circles cited by BILD, Galeria wants to use the process to cut costs sharply and attempt one more fresh start. Around 30 branches are expected to close for good, and thousands of jobs would disappear.
Beetz told BILD he regretted that the restructuring had not produced results fast enough. He added that employees had believed in the rescue until the end and would have deserved it.
What happens next depends on the court-supervised proceedings. Galeria can keep trading while a plan is worked out, either to restructure the company or sell off parts of it. With roughly one-third of its branches set to close, a slimmed-down chain may remain. That outcome would still leave many city centres without a major anchor store, and further weaken a retail format that once dominated German shopping streets.