The new owners of Galleria want to invest up to 100 million euros

The new owners of Galeria Karstadt Kaufhof want to invest up to 100 million euros over the next two or three years to modernize the remaining branches. But is this enough? A retail expert has identified a backlog of more than €1 billion in investments in the struggling German department store chain.

As part of insolvency proceedings, 16 of Galleria's 92 branches are scheduled to close in August. It has been known since the beginning of April that a consortium composed of the American investment company NRDC and the investment company BB Kapital SA of businessman Bernd Betz wants to acquire Galeria. They have not yet commented on how much money they want to invest in the department store company.

René Benco, former Galleria owner, pledged €200 million last year to revamp the retail chain, half of it as a loan. However, except for 1 million euros of capital, nothing has flowed in due to the financial difficulties faced by Benko's Signa Group. As a result, Galleria ran into difficulties and declared bankruptcy at the beginning of January. This is the third bankruptcy in three and a half years.

Retail expert Carsten Kortum sees a significant backlog of investments in Galleria. Only ten department stores have been updated so far. For the remaining 66, investment requirements average 20 million euros per branch, estimates a professor at the Baden-Württemberg State Cooperative University in Heilbronn. Overall, investments of more than one billion euros are needed.

The takeover by NRDC and Beetz will only take place if the insolvency plan is accepted by creditors on May 28 and then reconfirmed by the court. Denkhaus wants to hand the company over to new owners by the end of July.