'Exorbitantly high rents': Historic German store KaDeWe files for insolvency
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.
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.
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.
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.
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.
READ ALSO: London 'master thief' strikes at Germany's fanciest store
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"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.
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.
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.
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.
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.
READ ALSO: London 'master thief' strikes at Germany's fanciest store
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