Austria's Signa Group, which owns German department store chain Galeria Karstadt Kaufhof (GKK), seems to be teeing up ten of its stores for a fairly imminent sale, according to various reports.
An article in German business magazine Capital suggested that stores in Hannover, Bonn, Mainz, Mannheim, Aachen, Würzburg and Ulm were being put on the sales block - all of them ex-Kaufhof stores, which Signa inherited when it merged its Karstadt chain with its rival Kaufhof in 2019.
Capital said the affected ten stores, with an annual rent roll of €40m, were valued at €1bn in Signa's books. A flagship store next to Hanover's main railway station is valued at €200m, while the store in Bonn is valued at €140m. Commerzbank subsidiary Commerz Real is a 20% minority owner of the stores in Hanover, Bonn and Mannheim, which were part of an original 33-store internal portfolio earmarked for sale.
US private equity investor Apollo is being mentioned in connection with the forthcoming sale - not surprisingly, as it has bought other Kaufhof stores from Signa since the merger of the two retail chains. Last year Apollo bought a package of 21 stores from the 33-unit portfolio, but so far they have not officially confirmed their interest in the ten further stores.
Signa subsidiary Signa Prime has bought only a small number of the original 131 stores, which are still under a sort of Chapter 11 insolvency agreement after receiving federal loans of €460m earlier this year to avoid collapse. Another emergency loan package (this time for €200m) has since been agreed, REFIRE understands - but not enough to prevent 40 stores closing, and losses of more than €1bn in 2020 alone.
CEO Miguell Müllenbach recently announced a relaunch and a re-branding of Galeria Karstadt Kaufhof, with the names Karstadt and Kaufhof set to disappear, to be replaced with just the name Galeria. The websites of the two retail chains have already been changed to reflect this, and they've now been merged under the Galeria.de brand and web presence. Müllenbach said he would present the whole new strategic concept of Galeria 2.0 at the end of October.
It looks as if at least 60 of the remaining houses in the rump Galeria business will be marketed as three different groups - World City House, Regional Magnet, and Local Forum. The stores in Frankfurt, Kassel and Kleve are being prepped as pilot stores for the new concept. Müllenbach said about €600m will be invested in the next couple of years, with at least a third of that committed to improving its digital and e-commerce presence.
