The protective shield proceedings that the company filed for, according to the German insolvency law, is a three-month phase of creditor protection that enables potentially illiquid company to restructure itself without having to file for bankruptcy. The management remains in control during the procedure.
Galeria has lost more than 80 million euros (87 million U.S. dollars) in sales every week after authorities ordered all department stores to close on March 18, the company said in a statement.
In Germany, restrictions on public life will remain in place until April 19. The company's loss of sales would add up to more than 500 million euros by the end of April, said Galeria, which had previously announced that it would stop rent payments.
"We have made every effort to access the promised government aid from the first day of the shutdown," Chief Financial Officer Miguel Muellenbach said in the statement.
The application has been granted by the district court of Essen, the company said in the statement.
In 2018, Germany's two major retailers Kaufhof and Karstadt sealed a merger, creating the country's biggest department store chain amid fierce competition from e-commerce. The retailer now has more than 28,000 employees.
Retail is among industries hit hardest by the coronavirus. The German Retail Federation previously estimated that the ordering of store closures in Germany will lead to a loss of sales of around 1.15 billion euros per day or 7 billion euros per week.
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