NRDC Equity Partners and BB Kapital SA Acquires Galeria Karstadt Kaufhof GmbH

ESSEN, Germany–(BUSINESS WIRE)–NRDC Equity Partners, a New York-based investment firm, alongside investment firm BB Kapital SA, Bernd Beetz’s family office, have undertaken the acquisition of Galeria Karstadt Kaufhof GmbH.

The consortium of NRDC Equity Partners and BB Kapital SA is pursuing the takeover and financing of Galeria as part of an insolvency plan. Insolvency administrator of Galeria Karstadt Kaufhof GmbH, lawyer Stefan Denkhaus of the firm Boege Rohde Luebbehuesen (BRL), intends to submit the plan to the Essen District Court at the end of April; the creditors’ meeting is expected to vote on it in late May.

Insolvency administrator Stefan Denkhaus says, “We have been negotiating intensively with two potential investors, and, together with the creditors’ committee, we have selected two investment firms, BB Kapital SA and NRDC Equity Partners. The consortium convinced us with its entrepreneurial courage, a sustainable economic concept, and proven financial solidity.”

This acquisition is anchored in Bernd Beetz’s decades of experience solidifying and scaling German retail brands alongside NRDC Equity Partners’ history of successful long-term investments.

“We are extremely glad that we found unanimous support for our long-term plan,” said Bernd Beetz. “We believe in the future of Galeria, and we have only one focus: invest, develop, and grow the department stores. The next few weeks are crucial to establishing the prerequisites for a sound business case in place. Once these requirements are achieved, we are confident we will turn around Galeria and set it on a successful course.”

“Galeria is more than just a department store; it is an iconic brand in the shared experience of all Germans who deserve owners ready to operate it as a whole,” said Jack Baker, Founding Partner, NRDC Equity Partners.

“We are excited to work in tandem with Bernd, Olivier, and the existing management to provide long-term, sustainable value to our customers, employees, vendors, and landlords,” added Lucas Evans, Managing Partner of NRDC Equity Partners.

“BB Kapital’s experience in supporting organizational development and managing and developing brands makes us very complementary with NRDC Equity Partners’ track record of improving retail infrastructure and systems,” said Michèle d’Ancona, CEO of BB Kapital. “This will be a very strong combination for Galeria going forward.”

Galeria announced its insolvency in January 2024 following an effort to restructure its business and commitments. One of the key pillars of the future concept is the consistent local focus as a department store, which has been successfully expanded since summer 2023.

“Three months ago, we set in motion a plan to secure the future of Galeria Karstadt Kaufhof by filing for insolvency proceedings,” said Olivier van den Bossche, CEO of Galeria Karstadt Kaufhof GmbH. ”The aim was to achieve a disengagement from the old structure through a change of ownership. We wanted to keep Galeria as a whole competitive and continue the strategy of consistent local orientation. Today, we are decisively closer to this goal. This is the natural next step to protect and extend the future of Galeria. I fully support this acquisition, the investors, and the next stage for this great company.”

As part of the deal structure emerging from insolvency, Stefan Denkhaus will retain company oversight, most likely until the end of July 2024, – after approval by the creditors’ meeting – at which time full control of the company will transfer to NRDC Equity Partners and BB Kapital SA with Bernd Beetz as designated Executive Chairman of Galeria. The agreement stipulates that the German-American investor consortium receives Galeria as a whole and is expected to take over more than 70 shops Germany-wide.

Bernd Beetz, the former CEO of Coty Inc. and former Galeria supervisory board member, brings extensive knowledge of the German landscape, the retail industry, and Galeria to this venture. Under his leadership, Coty’s revenues almost quadrupled from $1.3 billion to $4.7 billion during this period. Before joining Coty – also as an entrepreneur – Beetz was responsible for the Christian Dior fashion perfume and cosmetics division worldwide at LVMH Moët Hennessy Louis Vuitton. Before that, Beetz spent 20 years in various management positions at Procter and Gamble (P&G) in Germany, Switzerland, Italy, and Turkey.

As many rental agreements are still being negotiated by the insolvency administrator and the Galeria management, the decision as to the number of shops to be taken over will be determined at the end of April. The company’s head office will also be adjusted to reflect the reduced size of department stores, with the aim of managing Galeria like a medium-sized company. The main focus in the coming days will be the reconciliation of interests and a social plan with the General Works Council. A transfer company will be initiated and organized in a socially responsible manner.

NRDC Equity Partners was advised by Robert Rizzo, Britta Grauke, and Christian Tappeiner at Weil, Gotshal & Manges LLP’s New York and Frankfurt offices. BB Kapital SA was advised by Dr. Matthias Lupp and Dr. Stefan Jörgens of Lupp + Partner.

About Galeria Karstadt Kaufhof GmbH

Karstadt Warenhaus GmbH, based in Essen, is a German department store chain. The two companies GALERIA Kaufhof GmbH and Karstadt Warenhaus GmbH have been working closely together since November 2018. From March 2019, Karstadt and Kaufhof appeared under the joint name GALERIA Karstadt Kaufhof.

In January 2020, the two companies were merged into one company. When the merger took effect, all rights and obligations of GALERIA Kaufhof GmbH were transferred to Karstadt Warenhaus GmbH, now trading as GALERIA Karstadt Kaufhof GmbH, in accordance with Section 20 UmwG.

About BRL

BRL is an international partnership of lawyers, accountants, and tax advisors founded in 2006. Today, the firm is represented by around 400 employees in Hamburg, Berlin, Bochum, Hanover, Dortmund, Essen, Munich and Bielefeld. With its own company for international mandates, and via the Moore Global international network of independent auditory and tax advisory companies with almost 30,000 members in more than 100 countries, BRL is ideally positioned to handle international matters for clients quickly and dependably.

About NRDC Equity Partners

NRDC Equity Partners is a private investment firm with a proven track record of creating value in the consumer, retail, and real estate industries.

NRDC Equity Partners specializes in investing throughout the consumer ecosystem, utilizing its unique market knowledge and proprietary consumer trend data to deliver outsized returns to its investors. We focus on brands, retailers, consumer technology, service providers, and the underlying real estate that enables that ecosystem.

The principals also control more than 50 million square feet of real estate.

About BB Kapital SA

BB Kapital SA, Lugano, was founded in 2012 as a private asset management company by Bernd Beetz after the initial public offering of the global US cosmetics company Coty Inc. BB Kapital is committed to long-term investments in companies in the luxury and consumer goods segment, where Bernd Beetz can contribute his many years of experience as a manager and entrepreneur directly to the development of the portfolio companies. The investments include companies in the fashion, beverages and delicatessen, accessories, perfume and cosmetics, as well as real estate and sports segments.