Galeria files for insolvency proceedings once again

The struggling department store chain Galeria has filed for insolvency with the Düsseldorf Local Court. Operations at its 83 stores will continue for the time being, the company told the German Press Agency.

The application creates the legal framework to bring order to the current situation, stabilise the company, and lay the groundwork for a sustainable future, Galeria said in a statement. Asked for details, the company initially provided no further information.

The approximately 12,000 employees now face uncertainty about their jobs. It remains unclear whether they will receive insolvency pay and whether – or which – locations will have to close.

New owners since 2024

For Galeria, this is the fourth insolvency filing in six years, following those in 2020, 2022, and 2024. Numerous branches were closed as a result of the earlier proceedings. Creditors waived claims worth billions of euros to give the department store chain a path out of the crisis.

A little over two and a half years ago, the company – then still operating as Galeria Karstadt Kaufhof – submitted its most recent application. This followed the financial difficulties of its then parent company, Signa. 

As part of the insolvency, nine of the 92 department stores had to close. Since the summer of 2024, Galeria has been owned by the US investment firm NRDC and an investment company of the entrepreneur Bernd Beetz. The names Kaufhof and Karstadt have been dropped from the company name. Galeria moved its head office from Essen to Düsseldorf.

Landlords complained about outstanding rent payments

Just under two years later, the chain was back in the headlines for the wrong reasons. In April 2026, several landlords complained of unpaid rent. Management cited liquidity fluctuations and admitted to having asked landlords for a deferral.

It was only in June that the department store chain secured new financing of up to 160 million euros. The money is intended, among other things, to refinance an existing loan and settle outstanding rent payments. The credit facility is being provided by the US investment firm Gordon Brothers. It is secured against Galeria’s stock and tied to a three-year restructuring plan that envisages further closures. 

In July, Galeria announced that it would review 33 department stores and negotiate rental terms with landlords. Without viable solutions, it said, the continued operation of the respective stores would be at risk. All department stores must operate on a sustainably profitable basis. A decision on the future of the stores was still pending most recently.

Retail in crisis

According to the EHI Retail Institute, the company’s revenues have fallen significantly in recent years, partly as a result of the closures. In 2019, Galeria Karstadt Kaufhof, with 174 branches, generated net revenue of 4.5 billion euros, according to EHI. Six years later, with fewer than half as many locations, Galeria reportedly generated just 2 billion euros. 

The significance of department and variety stores in the retail sector has declined sharply in recent years. According to EHI, their market share has fallen from 4.2% in 2020 to 1.2% most recently. These figures include, alongside Galeria, chains such as Müller and Woolworth.

Smaller operators such as Breuninger, the KaDeWe Group, and Kaufhaus Stolz still exist. However, the demise of Galeria would also mark the end of the era of traditional department stores.

Many insolvencies in the sector

Retail in Germany is under pressure due to weak consumer sentiment and the growth of online retail. According to the credit insurer Allianz Trade, the number of insolvencies in the retail sector has reached a 10-year high. Between June 2025 and May 2026, just over 2,600 retailers filed for insolvency. More recently, further high-profile cases have followed.

These include the non-food discounters Kodi and Mäc Geiz, which are closing numerous branches. The home décor chain Depot is ceasing trading. The DIY chain Hellweg is also being wound up, with a number of its branches being taken over by other retailers.

In recent years, tens of thousands of shops across the country have closed for good, not only as a result of insolvencies. According to a forecast by the German Retail Association, the number of shops is likely to fall below 300,000 this year. At the end of 2015, the figure stood at around 372,000.