This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at www.capital.de. Like stern, Capital belongs to RTL Deutschland.

Galeria Karstadt Kaufhof (GKK) recently had to file for bankruptcy three times within three years. And even if at first glance the reasons were external, namely the corona pandemic and the bankruptcy of the parent company Signa, the department store chain’s problems are obvious. Now everything should be different. Once again. A consortium made up of the US investment company NRDC Equity Partners and the entrepreneur Bernd Beetz is apparently preparing to take over the group and put it on a healthy footing. Several media outlets report this unanimously.

But: Who are the two investors – and above all: What do they plan to do with the ailing department store chain?

There is probably no clear answer to the last question as the deal has not yet been finally signed. However, from the past of the two, it may be possible to deduce where the journey is headed. Because it would not be the first time that both of them would be responsible for parts of the group.

The name Richard Baker is behind NRDC Equity Partners. The 58-year-old Canadian also has a majority stake in the department store companies Hudson Bay Company (HBC) and Saks Fifth Avenue. Through HBC, he was the owner of Galeria Kaufhof between 2015 and 2019 before the department store chain was sold to the Signa Group and merged with Karstadt. HBC had already sold a majority of 50.01 percent to Signa in 2018, and the complete takeover followed a year later.

There had been rumors of interest in buying around Baker and his family office NRDC from the start. The interest still came as a surprise to many industry observers because Baker had failed miserably the last time. In the end, Baker hesitated for a long time about selling his Galeria position to Signa for the rumored sum of one billion euros. But the process was preceded by steep growth forecasts and equally great disappointment. Of the 103 branches, 97 remained before the merger.

In the end, there was damage to the land and damaged management staff. Among those who left at the time was Olivier Van den Bossche, who is now CEO of the group.

It will therefore be all the more exciting to see how Baker imagines his return to GKK. In any case, the well-known German entrepreneur Bernd Beetz is also on board. The 73-year-old from Sinsheim in Baden-Württemberg has worked for various retail and luxury brands such as Procter

For Beetz it would also be a return to GKK. He was chairman of the supervisory board of the newly merged GKK Group during the transition phase between 2018 and 2019, and left when Signa took over the entire company. According to media reports, the internal reactions to Beetz’s return are more positive than those at Baker. Beetz is considered well connected and has a firm belief in traditional trade.

Real estate is likely to be at the top of the list for new investors. There is always talk of “60 x” branches that should be saved – including under the new consortium. The exact number depends on the extent to which property owners are willing to reduce rent.

According to “Handelsblatt”, the Signa locations in particular are at risk because rents there have so far been significantly above the market level. These would be, for example, the houses in Heidelberg, Ulm, Aachen, Mainz, Würzburg and Wismar. Since these are not prime locations, they are considered bargaining chips.

Conversely, the rental rate for the important flagship stores in Cologne, Berlin and other major cities is often over 30 percent, which, according to real estate experts, is far above economic reason. The aim here is a value between 10 and 15 percent. At smaller locations only seven to eleven percent.