The world-famous Berlin department store KaDeWe is preparing an insolvency application, according to reports from the German business magazine Capital. KaDeWe, which stands for Kaufhaus des Westens, is Berlin’s most iconic department store and has been open since 1907. The store is owned by the KaDeWe Group, which also operates the luxury department stores Oberpollinger in Munich and Alsterhaus in Hamburg.

It is unclear what the future holds for KaDeWe, but it is important to note that the stores will continue to operate under self-administration. According to a report by Deutsche Welle, the owner of KaDeWe has filed for bankruptcy due to “exorbitantly high rents” in Berlin, Hamburg, and Munich. The KaDeWe Group has filed for self-administration to uncouple from the high rents it has to pay.However, analysts remain optimistic about the store’s future.The head of retail consultancy BBE, Johannes Berentzen, estimated that rents for the KaDeWe Group amount to 13% to 20% of store turnover, depending on the location. “For the majority shareholder Central, insolvency could be worthwhile in order to get out of the expensive rental agreements,” Berentzen said. “I am certain that all three stores will continue to operate,” he added, stressing that luxury retail continues to perform well.

The insolvency proceedings are due to bankruptcies at Signa Holding, which bought a majority stake in KaDeWe in 2014. Signa Holding announced in November 2023 that it would begin insolvency proceedings. Insolvency at Signa has also resulted in the impending mass closures at Galeria Kaufhof and partner company Karstadt, which have been owned by Signa’s CEO, Austrian billionaire René Benko, since 2019.

Upon news of KaDeWe’s planned insolvency application, former mayor and current Berlin Senator for Economic Affairs Franziska Giffey (SPD) said that the city’s senate would do everything it can to preserve KaDeWe, “one of our city’s landmarks for over 100 years”. KaDeWe attracts between 40,000 and 50,000 visitors every day.

It is unfortunate to see such an iconic store facing financial difficulties. However, it is important to note that insolvency proceedings under self-administration have been applied for, and the stores will continue to operate. It remains to be seen how the situation will develop, but it is clear that KaDeWe holds a special place in the hearts of Berliners and visitors alike.

The insolvency of KaDeWe is a reminder of the fragility of even the most iconic institutions. It is a testament to the importance of responsible business practices and the need for greater transparency in the corporate world. I hope that this situation will serve as a wake-up call for other companies to take a closer look at their own practices and make the necessary changes to ensure their long-term viability.

History of KaDeWe