Berlin's iconic KaDeWe department store files for bankruptcy amid skyrocketing rents
The Kaufhaus des Westens (KaDeWe) is the second largest department store in continental Europe, trailing only Harrods in London. It sprawls over an area of 645,835 ft².
As reported by Deutsche Welle, the department store's owner filed for bankruptcy, largely speculated to be due to a "drastic increase in rental costs". The issue is tied to the bankruptcy of the Signa Company, the owner of KaDeWe and two other large German luxury shopping destinations.
Deutsche Welle reported that the KaDeWe Group has stated that high rents in Germany (particularly in Berlin, Hamburg and Munich) make it nearly impossible for a "profitable operation to sustain in the long run."
Despite the difficult financial situation, there remains a sense of optimism. - "We're aware that the second investor of the property is a fund from Thailand. They currently hold over half the shares in KaDeWe and are interested in acquiring more. We have been in talks with them for several weeks now," Berlin's Deputy Mayor Franziska Giffey assures, as quoted by RMF24.
-"There's no doubt that the group can have a promising future ahead with reasonable rental rates," informs KaDeWe's CEO, Michael Peterseim.
"KaDeWe is doing great," reports Rundfunk Berlin-Brandenburg (a regional German broadcaster). "Insolvency signals an attempt to break free from unfavorable contractual relations," we learn.
Sources: Deutsche Welle