Historic German store KaDeWe files for insolvency

Historic German store KaDeWe files for insolvency

Berlin's famous KaDeWe (Kaufhaus des Westens) department store is the latest victim of rising property rental prices
Berlin's famous KaDeWe (Kaufhaus des Westens) department store is the latest victim of rising property rental prices. Photo: Tobias Schwarz / AFP/File
Source: AFP

Iconic Berlin department store KaDeWe said Monday it had filed for insolvency, as rising rental prices in Germany left it struggling to stay afloat.

"Exorbitantly high rents" in Berlin, Hamburg and Munich, where the group manages stores, "make it almost impossible to operate profitably in the long term", KaDeWe said in a statement.

The trio of shops had recorded "the strongest sales year in the company's history in 2022-23", the group said.

But while revenues were up by 24 percent compared with 2018-19, the last year before the pandemic shut down large parts of the economy, rents had climbed 37 percent and showed no signs of slowing their rise, KaDeWe said.

"There is no question that the group can have a strong future with normal rents," said KaDeWe CEO Michael Peterseim.

Read also

Buried in massive debt, Italy puts crown jewels up for sale

Opened in 1907, the KaDeWe store is in the commercial heart of what used to be West Berlin, and was frequented by the likes of David Bowie during his time in the German city.

PAY ATTENTION: Watch the hottest celebrity stories on our YouTube channel 'Briefly TV'. Subscribe now!

Its iconic status has seen it become the subject of a television series in Germany, which dramatised the lives of employees at the up-market department store.

The majority owner of KaDeWe is Central Group from Thailand, which holds 50.1 percent of the shares.

The rest are held by the Austrian real estate giant Signa, which itself filed for bankruptcy in November.

The holding group has since set about trying to sell some of its best-known assets, such as New York's iconic Chrysler building.

Opened in 1907, the KaDeWe store is in the commercial heart of what used to be West Berlin, and was frequented by the likes of David Bowie during his time in the German city
Opened in 1907, the KaDeWe store is in the commercial heart of what used to be West Berlin, and was frequented by the likes of David Bowie during his time in the German city. Photo: John MACDOUGALL / AFP/File
Source: AFP

In the aftermath, Signa lost control of iconic British department store Selfridges, while Galeria Karstadt Kaufhof, a less exclusive German department store chain owned by Signa, also filed for bankruptcy.

Read also

LVMH posts record sales and profit in 2023

Signa owns and leases the buildings used by the KaDeWe group, the department store operator said.

Neither the Austrian group's own insolvency nor "numerous discussions with the landlord" had done anything to make the rent more affordable, Peterseim said.

PAY ATTENTION: Сheck out news that is picked exactly for YOU - click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.