Exorbitant Rents: The Financial Burden of Signa on Galeria Karstadt Kaufhof

| editorial staff

|
11.12.2023

Signa rents a total of 18 houses to the department store group – sometimes at extremely overpriced prices, as an insider has now revealed.

For a long time, René Benko was considered the savior of the Galeria Karstadt Kaufhof department store group. After all, he provided financial support for two bankruptcies. But Galeria’s rescue came at a high price, especially since the company sometimes had to pay immensely high rents to Signa.

As manager magazin reports, for example, four million euros in rent are due per year for the headquarters of Galeria Karstadt Kaufhof in Essen, an unspectacular office complex a good four kilometers outside the city center. 18 houses belong to Signa and are rented to Galeria. Galeria has a total of 92 branches, 82 of which are in the black. Of the ten that are not profitable, nine belong to Signa.

200 million euros in rent per year

One of the reasons why they can’t get out of the red is the overpriced rents, a manager is quoted as saying. The department store on Hohe Straße in Cologne is said to cost 18 million euros a year. That’s 32 percent of sales. In Frankfurt it is 25 percent of sales, in Mannheim 19 percent. A total of 200 million euros in rent flows to Signa every year.

“For Signa, Galeria was a huge burden, but Signa was also a huge burden for Galeria. The relationship is toxic. “It would be better for both sides if Galeria was independent,” a high-ranking manager from Benko’s conglomerate is quoted as saying.

In February 2024, the first 50 million euros, which Benko had promised during the second bankruptcy, should flow to Galeria. The tranche is urgently needed, especially since the liquidity threshold must not fall below 100 million euros so that the trade credit insurers do not default. If the money doesn’t come, the company is considering withholding rent for the locations. In any case, Galeria boss Olivier van den Bossche and supervisory board boss Wolfram Keil have to think about exit strategies.

2023-12-11 16:38:32
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