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Tough negotiations: Kaufhof relies on Seitz during its crisis

As reported by German news magazine Der Spiegel, a deficit of more than 100 million euros was incurred in the past fiscal year. Without drastic restructuring measures, the business could not have been continued for long.

As reported by German news magazine Der Spiegel, a deficit of more than 100 million euros was incurred in the past fiscal year. Without drastic restructuring measures, the business could not have been continued for long. The 400 jobs currently being cut at the head office in Cologne are only a drop in the ocean. Kaufhof employs a total of 21,000 people, for whom the company would like to save personnel costs. It is not known exactly what cuts could be made to the employees.

Usually, however, collective employment protection agreements aim to avoid redundancies and save on salary costs in other ways.

The union is currently examining Kaufhof's restructuring concept and wants to gain an insight into the financial situation of the company and its parent company Hudsons Bay Company (HBC). Next Friday, Verdi is to decide whether the employee representatives will start negotiations on a collective agreement to secure employment. With the "Turn2Win" future concept, Kaufhof aims to return to the black within the next three to five years through store conversions, brand strengthening and better interaction between the individual sales channels.

In 2015, the Canadian HBC purchased the department store chain from the Metro Group. Today, Kaufhof employs around 21,000 people and operates 96 stores nationwide. CEO is Roland Neuwald. It had already become known in autumn 2017 that the company wanted to withdraw from the industry-wide collective agreement in order to compensate for some of the poor business results and to give the company an "economic breathing space". Just a few weeks ago, HBC rejected Karstadt’s  owner Signa's offer to take over the struggling chain.


Consultant Kaufhof

Seitz (Cologne): Dr. Stefan Seitz (Lead), Dr. Marc WernerHeinke von Netzer (Salary Partner), Associates: Annika Hausmann 

Inhouse Law (Cologne): Ayfer Aslan-Blomenkämper (Head of Labour Law/Tariff Policy/HR), Anton von Carlowitz (General Counsel), Tim Neuss (Labour Law)

Advisers to Verdi

Ebner Stolz (Stuttgart): Bernhard Steffan

Background: All consultants are known from the market. Name partner Seitz was involved with his law firm as early as 2015 in HBC's entry into Kaufhof, but at that time he was on the side of the losing bidder René Benko and his Signa Group, the owner of Karstadt. He was appointed by recommendation. One reason why Kaufhof relies on Seitz is probably his experience in rescuing large department stores: Seitz had negotiated the restructuring of Karstadt with the local works council and Verdi in 2014 - as has now become apparent, the concept has worked. Karstadt recorded a surplus in 2017 for the first time in years. According to JUVE information, Aslan-Blomenkämper is leading the project in-house and is now reporting to Peter Herlitzius, the member of the management responsible for personnel issues.

Due to the complex international corporate structures, in mandating Ebner Stolz partner Steffan Verdi apparently chose an auditing firm, instead of instructing a traditional employee oriented law firm. During the Karstadt restructuring and many times before, Verdi had relied on the Cologne law firm Decruppe & Kollegen, which is known for its advice in collective bargaining. Insolvency expert Steffan was involved as a consultant in the disputes between Deutsche Bank and Leo Kirch in the course of the Kirch insolvency.

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