German retail giant Galeria insolvent in wake of Signa collapse

Galeria, the nation's most prominent retailer, is owned by Signa, the insolvent Austrian-based property empire that has become the biggest casualty so far in Europe's real-estate crisis. It is the third time that Galeria, with 15,000 employees, filed for insolvency in recent years.

German department store giant Galeria Karstadt Kaufhof said on Tuesday it had filed for insolvency, as the fallout of a real-estate crisis in the region widens. Galeria, the nation's most prominent retailer, is owned by Signa, the insolvent Austrian-based property empire that has become the biggest casualty so far in Europe's real-estate crisis.

It is the third time that Galeria, with 15,000 employees, filed for insolvency in recent years. The pandemic pushed it to file in 2020, and soaring inflation and energy costs in the wake of the Ukraine war hit it again in 2022. This time, Galeria's troubles stem from its owner Signa, which had committed to providing Galeria with 200 million euros ($218.62 million), a payment that became unlikely in light of its troubles.

"The numerous insolvencies of the Signa Group are massively damaging Galeria," the company said in a statement. The holding company of Signa - a group of some 1,000 companies, with high-profile projects and stores across Germany, Austria and Switzerland and a stake in New York's Chrysler Building - filed for insolvency late last year with around 5 billion euros in debt.

Other Signa businesses have since followed suit, including some of its biggest divisions, prompting banks, insurers, pension funds and other investors to try to recoup some of the billions lost. ($1 = 0.9148 euros)