Management at to Galeria Karstadt Kaufhof warned employees this week in a letter that the coronavirus crisis will result in permanent store closures and job losses. When the company placed itself in administrative insolvency in April it was already bleeding badly needed cash. But the closure of stores due to the pandemic meant it had no way to generate income to make up for the losses. Unions have criticized the threatened job losses, unimpressed by the argument that both people and stores had to be sacrificed. However, the failing retailer has already lost €500m due to restrictive measures and it’s unlikely to thrive now that stores are opening up again, as retail sales are expected to pick up only very slowly. Leaders of the Verdi union said the company should be seeking ways to offer employees and its stores a future, not just cutting back on stores and staff. Former director Claudia Reinery has been brought back into the management team as a consultant, which will see her working at Galeria Karstadt Kaufhof a few days per week.
