Wednesday 31, January
KaDeWe goes bankrupt: What next for Berlin’s house of luxury?
The KaDeWe department store first opened in 1907, with the giant building long since standing as a symbol of West Berlin luxury, wealth and consumerism. That gilded reputation has now been tarnished as the KaDeWe group, who operate the building, filed for bankruptcy on January 29.
How did this happen? As late as November last year, managing director Michael Peterseim was giving interviews saying the store was doing well. But the truth may have been a little murkier. According to a report in rbb, it seems the company has been violating disclosure agreements by not filing any public financial statements for 7 years, something which seems to have been a tactic of their (also bankrupt) co-owners: Signa holding.
Given that they lacked any financial records on which to base their decision, it might seem odd that Berlin decided in 2020 to guarantee KaDeWe’s debts. But that’s exactly what they did, granting the company a loan of €90 million of tax money. That money is now gone, with the state of Berlin liable for half the funds and the federal government picking up the rest of the bill. With this bankruptcy and Signa’s previous filing, the company has now received more than a billion euros in public money.
So will KaDeWe survive? Probably. Major Kai Wegner (CDU) has signalled he would like to try to save the store, perhaps with co-owners, the Thai multinational conglomerate Central Group, taking full ownership. Whatever happens, it will likely cost Berlin even more money.