Galeria in constant crisis: fourth bankruptcy in six years

dpa | The ailing department store chain Galeria has applied to the Düsseldorf district court to open insolvency proceedings. The company told the German Press Agency that business operations in the 83 branches will continue for the time being.

The application creates the legal framework to sort out the current situation, stabilize the company and create the conditions for a sustainable future, Galeria explained in a statement. When asked, the company initially did not provide any further information about the background.

The approximately 12,000 employees now have to fear for their jobs. It is still unclear whether they will receive insolvency money and whether or which locations will have to close.

For Galeria, this is the fourth bankruptcy filing within six years, following 2020, 2022 and 2024. Numerous branches were closed as a result of the previous proceedings. The creditors waived claims worth billions in order to enable the department store chain to emerge from the crisis.

A good two and a half years ago, the company, then still under the name Galeria Karstadt Kaufhof, submitted its last application to date. This was preceded by the difficulties of the then parent company Signa.

As a result of the bankruptcy, 9 of the 92 department stores had to close. Since summer 2024, Galeria has belonged to the US investment company NRDC and an investment company owned by entrepreneur Bernd Beetz. The names Kaufhof and Karstadt disappeared from the company name. Galeria moved its headquarters from Essen to Düsseldorf.

Almost two years later, the chain hit negative headlines again. In April 2026, several landlords complained about missing rent payments. The management referred to liquidity fluctuations and admitted that they had asked landlords for a deferment.

It was only in June that the department store chain received new loan financing of up to 160 million euros. The money is used, among other things, to repay a current loan and to pay outstanding rent payments. The credit line is provided by the US investment company Gordon Brothers. It is secured by Galeria's goods and is linked to a three-year restructuring plan that includes further closures.

In July, Galeria announced that it would examine 33 department stores and negotiate rental conditions with landlords. Without viable solutions, the continuation of the respective branch would be at risk, it was said. All department stores must operate sustainably and profitably. A decision about the future of the branches was still pending.

According to the retail research institute EHI, the company's revenues have fallen significantly in recent years, also as a result of the closures. In 2019, Galeria Karstadt Kaufhof achieved net sales of 4.5 billion euros with 174 branches, according to EHI. Six years later, Galeria only had sales of 2 billion euros with less than half of its locations.

The importance of department stores and department stores in retail has declined sharply in recent years. According to EHI, their market shares have fallen from 4.2 percent to 1.2 percent since 2020. In addition to Galeria, these figures include the Müller and Woolworth retail chains, among others.

There are still smaller providers such as Breuninger, the KaDeWe Group and the Stolz department store. However, an end to Galeria would also mark the end of the era of classic department stores.

Retail in Germany is under pressure due to weak consumer sentiment and growing online retail. According to credit insurer Allianz Trade, the number of retail bankruptcies has reached a ten-year high. Between June 2025 and May 2026, a good 2,600 retailers filed for bankruptcy. More prominent cases have recently been added.

This affected, among others, the non-food discounters Kodi and Mäc Geiz, which closed numerous branches. The decorative chain Depot is ceasing its business operations. The Hellweg hardware store chain will also be liquidated, and several branches will continue to be operated by other retailers.

In recent years, tens of thousands of stores nationwide have closed permanently, and not just as a result of bankruptcies. According to a forecast by the German Trade Association, the number of stores is likely to fall to less than 300,000 this year. At the end of 2015 there were still around 372,000.