“It's a huge mess”
KaDeWe Group is said to have been in the red for years
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At the end of January, the KaDeWe Group unexpectedly filed for bankruptcy. How could this happen? A report now shows that the luxury department stores have been racking up ever greater losses for years. SPD politician Markus Schreiber blames René Benko's Signa empire.
According to a report, the insolvent KaDeWe Group, which includes the department store of the same name in Berlin, the Alsterhaus in Hamburg and the Oberpollinger in Munich, has been making losses for many years. According to “Spiegel”, the department stores, which belong to the Signa Group owned by Austrian René Benko, are said to have posted a moderate loss of 8.5 million euros in the financial year that ended in September 2015. In the following years, the debts are said to have continued to grow. In 2022, the group accumulated a loss of 72.7 million euros.
One reason for this is said to have been the rental payments to the Signa Group. Between 2014 and 2015, the short- and long-term rental and leasing obligations of the KaDeWe retailers for the stores amounted to around 2.8 billion euros; by 2022, the sum had already risen to 3.4 billion.
“It is a huge mess that Signa knowingly drove the department stores into bankruptcy through excessive rents,” criticizes Hamburg SPD politician Markus Schreiber. The management warned several times in its balance sheets that the company was “over-indebted”. In the past financial year 2022, the company posted a deficit of 92.3 million euros not covered by equity, but seven years earlier it was 16.7 million euros. Help from shareholder Signa, for example in the form of loans, kept the luxury stores afloat for years.
Nevertheless, in 2020 the federal government, Berlin, Bavaria and Hamburg jointly guaranteed 81 million euros for a loan of 90 million euros to the KaDeWe Group, which was used to finance ongoing business activities. As “Spiegel”, which claims to have the relevant documents, reported, neither the Federal Ministry of Economics nor the states wanted to comment on the guarantees and referred to confidentiality. At least, it is now said, the company has already repaid about a third of the loan.
