The previous owner, the insolvent Austrian Signa Prime Selection, and the group had reached an agreement for the complete acquisition, Central announced on Friday. The group is also in discussions about acquiring “further assets” from the KaDeWe Group.
The Central Group could take over the entire KaDeWe Group, industry insiders told Reuters. In addition to the luxury department store of the same name in Berlin, the KaDeWe Group also includes the Alsterhaus in Hamburg and the Oberpollinger department store in Munich. The Central Group, which is backed by a Thai billionaire family, already holds a majority stake of 50.1 percent in the group. According to insiders, she is also interested in the remaining Signa shares. Together with Signa, the Central Group also took over the Globus department stores in Switzerland and the British chain Selfridges. Central has broad retail experience – it operates numerous shopping centers and markets in Thailand.
“Orderly exit from insolvency proceedings”
The Central Group is “confident that, as the new owner of the Berlin property, it will be able to agree on the acquisition of further assets and thus initiate an orderly exit from the insolvency proceedings,” the Thais said. For Central, the purchase of the luxury department store property in a prime location in Berlin is “the first important milestone in the renovation and restructuring of the KaDeWe Group into a sustainable, financially viable company,” said Vittorio Radice, CEO of Central Group Europe. Central Group executive chairman Tos Chirathivat said the investment in the KaDeWe property “underlines our family’s commitment to the KaDeWe Group”.
The Charlottenburg district court in Berlin approved an insolvency application by the KaDeWe Group in January. At the time, the company cited “exorbitantly high rents” as the reason for the difficulties. The properties of the department stores in prime inner-city locations had belonged to Signa. The KaDeWe Group employed around 1,700 people in January. Department store giant Galeria Karstadt Kaufhof also belonged to Signa – it was sold to two investors from North America and Germany this week. Galeria had also criticized excessive rents for the department stores, some of which were owned by Signa.
Signa, which operates in the retail and, above all, real estate business, suffered the biggest bankruptcy in Austrian economic history. Creditors are making claims worth billions. Signa is the biggest victim of the real estate crisis in Europe so far. In addition to home-made problems, the real estate giant was also struggling with rising interest rates and construction costs as well as transactions on the real estate market that had almost come to a standstill.
The mall of the West”
The “Department Store of the West” is significantly older than the Cold War that its name sounds like. It was opened on March 27, 1907 – in what was then an upper-class residential area away from the shopping mile at Potsdamer Platz. In 1927, founder Adolf Jandorf sold to the Jewish merchant family Hermann Tietz. During the Nazi era, the owners were forced out of the management and the merchant family’s name became “Hertie”.
In 1943, an American plane crashed into the KaDeWe and the building was in ruins. The new beginning came in 1950; during the Adenauer era, the department store became a symbol of consumption and purchasing power. For the 100th birthday party, the Berliners stormed the house in March 2007 and picked up pieces of a 6.50 meter high giant cake.
The KaDeWe has 60,000 square meters of shopping space in the middle of the capital – the equivalent of around eight football fields with high-quality clothes, shoes, handbags and delicatessen. In addition to fans of luxury goods, thousands of tourists also make their way to the renowned building every day. The department store was most recently renovated over the years from 2016 at a cost of tens of millions of euros. The Galeries Lafayette are leaving Berlin in the summer – so KaDeWe will have one less luxury competitor in the capital in the future.
