German retail chain Galeria files for fourth bankruptcy in six years

Struggling German department store chain Galeria has filed for bankruptcy for the fourth time in six years.

The business operations in the 83 branches are set to continue for the time being, the company told dpa on Friday. 

Galeria said in a statement that the application intended to create the legal framework to stabilize the company and create the conditions for a sustainable future.

The department store operator did not respond to a request for further details. It is still unclear whether branches will have to close as a result of the insolvency proceedings.

The company's 12,000 employees were informed of the step on Friday morning and now face uncertainty about their jobs, and about whether they will receive insolvency pay, as Galeria remains under supervision after its most recent insolvency proceeding.

Galeria's works council initially declined to comment, telling dpa that its primary concern is the workforce.

Bad news for Galeria's new owners

This is the fourth insolvency within six years for Galeria after proceedings in 2020, 2022 and 2024. Numerous branches were closed as a result of the previous insolvencies.

Creditors waived billions in claims to enable the department store chain to find a way out of the crisis.

Just over two and a half years ago, the company - which at that time was still operating under the name Galeria Karstadt Kaufhof - filed its most recent insolvency application following financial difficulties under its then parent company, Signa. Signa has since collapsed and its founder, René Benko, faces fraud charges in Austrian court.

In the wake of the insolvency, nine of the company's 92 department stores were forced to close. Galeria was taken over by the US investment firm NRDC and an investment company belonging to the entrepreneur Bernd Beetz. Under the new owners, the company shortened its name and relocated its headquarters from Essen to Dusseldorf.

Outstanding rent payments bring new trouble

More trouble emerged in 2026, when multiple landlords complained about outstanding rent payments. 

Galeria's management cited liquidity fluctuations and admitted to having asked landlords for a deferral. In June, the company secured new credit financing of up to €160 million ($180 million) to repay an existing loan and settle outstanding rent payments. 

In July, the company then announced that it would be reviewing 33 department stores and negotiating rental terms with landlords. Without viable solutions, the continued operation of the respective branches would be at risk, Galeria warned.

According to the EHI Retail Institute, the company's revenue has fallen significantly in recent years, partly as a result of the closures. In 2019, Galeria Karstadt Kaufhof, with 174 branches, generated net turnover of €4.5 billion, EHI said.

Six years later, with fewer than half the number of stores, Galeria generated just €2 billion in turnover, EHI figures showed.

Germany's retail sector is under pressure due to weak consumer sentiment and the growth of online retailers reducing the importance of traditional department stores and shopping centres.

Credit insurer Allianz Trade said the number of insolvencies in the retail sector has reached a 10-year high, with just over 2,600 retailers filing for insolvency between June 2025 and May 2026.