The director of Galeria Karstadt Kaufhof, Miguel Müllenbach, has expressed his concerns regarding the ongoing lockdowns in Germany and how they are affecting the business sector, particularly textile retailers. He highlighted that warehouses are now overflowing with unsold inventory, leading to the necessity for unprecedented price reductions in the clothing sector.

To tackle this challenging situation, Müllenbach has unveiled plans for a major price reduction campaign in the fashion sector as soon as lockdown measures are eased. However, he also mentioned that the department store chain might require additional government aid to stay afloat if lockdown restrictions persist. Müllenbach admitted that the possibility of needing extra funds cannot be ruled out.

Müllenbach credited the group’s owner, Signa, for their support in preventing the closure of department stores and saving the 20,000 jobs associated with Galeria Karstadt Kaufhof. Earlier this year, the German government provided a loan of €460 million ($556 million) from the Economic Stabilization Fund to the company.

While Müllenbach did not specify the exact amount of aid required, he mentioned that it would depend on the evolving situation in the coming weeks. In response to questions about the company’s monthly expenses of approximately €100 million, Müllenbach neither confirmed nor denied the figure but acknowledged that the general magnitude is accurate.

The challenges faced by Galeria Karstadt Kaufhof shed light on the immense hardships experienced by retailers during prolonged lockdowns. The reduced foot traffic and mandatory store closures have placed significant financial strain on the industry. As the situation continues to evolve, it is crucial for the fashion sector, as well as other industries, to develop innovative strategies and seek additional support to ensure their survival and pave the way for recovery.

Useful links:
1. Reuters: Galeria Karstadt Kaufhof Needs More Aid if Lockdowns Continue
2. DW: Coronavirus and Domestic Consumption in Germany