Tengelmann realigns holding

  • Altered internal circumstances and market conditions require the continued realignment of the company that began years ago
  • Objective: strengthen free enterprise and pass the Group in a good condition to the next generation
  • Lean holding at a new location in Mülheim
  • Rough concept foresees focus on strategic leadership, development and cooperation with those involved
  • Nine months' guaranteed employment for employees of the holding followed by reduction in personnel with fair, transparent rules for the employees affected
  • Cooperation planned with the City of Mülheim for development of the previous location

The holding of the Tengelmann Group wants to re-establish itself in 2019 and is therefore formulating a response to the altered internal and external realities. The rough concept foresees the future control of the companies by a holding company with stronger strategic alignment. This should be concentrated above all on the strategic cooperation with the holdings away from the daily business as well as the provision of select services for the companies. The holding is to be set up at a new location in Mülheim. The planned development of the holding at a new location means the end of extensive tasks to maintain buildings and other infrastructure at the Wissollstraße location. The plans foresee the new holding as considerably leaner, meaning that most of the current jobs will be cut. That is the result of comprehensive considerations and discussion of the advisory board and the board of directors. The concept will be substantiated over the next few months.

Early communication is designed to avoid any further unease of employees caused by the public discussion about the future of the holding. To provide support, the company is announcing a nine-month long employment guarantee for the employees of the holding.

Following the conclusion of detailed planning, fair and transparent rules will be developed together with the employee committees for the employees affected which take into consideration their long and loyal service in the Group. Management of the new holding will be taken on by the CEO of the Tengelmann Group, Christian W. E. Haub. Ágnes Faragó - as the Chief Financial Officer (CFO) - and Dr. Andreas Guldin - as the Chief Strategy Officer (CSO) - will work as additional directors.

Altered requirements of the companies and the markets

This decision is the logical progression of the alteration process which has been pursued by the Haub brothers since the year 2000. The ownership structure has changed considerably since then. Since giving up Kaiser’s Tengelmann in 2017, the company must now re-set the agenda. In this way Christian Haub, now as sole personally liable partner, is reacting to internal changes on the part of the companies, which include OBI, KiK, TEDi, Trei Real Estate as well venture companies in Germany and the USA. At the same time known challenges such as increasing globalisation and the necessity to digitise affect the Group too. The new alignment will also provide answers here. Lean holding with a focus on strategic control The holding is to be considerably leaner in future because due to the altered investment portfolio, the number of tasks to be completed has reduced. In future individual operative tasks which are today carried out by the holding are to be carried out by the companies themselves. The holding will continue to perform services for the companies - some will be continued and others introduced. The will also be a greater separation between the holding and the business family.

Nine month employment guarantee - reduction in staff with fair and transparent dealings with employees

The necessary reduction in size of the holding will be accompanied by the loss of most of the approximately 250 jobs. Such measures are deeply regrettable, yet are unfortunately unavoidable in view of the tasks and dimension of the holding. In order to provide the employees with the opportunity to plan for a secure future, the company is announcing a nine-month employment guarantee. Talks will begin with the employee committees after the detailed planning stage has ended. The objective is to take into appropriate consideration the committed, local employees, some of whom have been employed for many years and to develop packages of measures which can be tailored to the individual situation of the employees. The establishment of the holding company will take many months. Until then the daily business will continue in the usual way and all employees will remain entrusted with their respective tasks.

Responsibility for the Wissoll location

The holding company is to be set up at a location in Mülheim which is yet to be determined. The Wissollstraße location will be closed in the medium term. This takes into account the fact that the existing facilities have become too big for the requirements of the company and therefore cannot be administered economically. In addition, the Wissollstraße can only be developed as a whole - which is why part use is no alternative. Working closely together with the city has been planned in order to develop a stable succession concept. Details will be developed over the coming months. "The leaner holding should sound a new beginning in the cooperation with our companies. In its 151-year history the Tengelmann Group has reinvented itself again and again without compromising its fundamental business principles and values. What appears to be a break represents the logical progression of the history of the firm," says Christian Haub of the decision. "We deeply regret that most of our employees will lose their job. It was very difficult for us to take this step, though is unavoidable given the planned alignment of the new holding. It is therefore all the more important for us as a company and family to make this step socially responsible for our employees," says Christian Haub.

About the Tengelmann Group
The Tengelmann Group is one of the most significant commercial companies in the world. In addition to its strategic fields of business, more than 80 start ups comprise the Tengelmann portfolio. In the year 2017 more than 86,000 employees generated net revenue of 7.5 billion euros. The textile discounter KiK, OBI DIY stores as well as babymarkt.de make up the association of companies. Also part of the group are the real estate company Trei Real Estate as well as the holding companies Emil Capital Partners in the USA and Tengelmann Ventures in Germany, which have been investing in start-ups for several years.