The National Socialist movement had been targeting Jewish residents and companies since its founding in Munich in 1919/20. After the Nazi Party assumed the reins of government in 1933, the hostility and repression grew steadily worse. In March 1933, Max Uhlfelder and 280 other people of the Jewish faith were placed in so-called "protective custody." Demonstrators held protests outside the department store during the anti-Semitic boycott of April 1933.
Government action targeting the Jews began to intensify in 1935 as legislation increasingly sought to strip Jews of their rights. Munich was in the vanguard of this campaign. In the so-called "Reichskristallnacht" of November 9-10, 1938, the department store was ravaged, plundered, set ablaze, and left with its doors open for days on end. Max Uhlfelder, his son and some 1,000 other Jews were incarcerated in Dachau where many of them were severely mistreated and several died. In January 1939, the Uhlfelders were released and obtained visas for India, guaranteeing their survival. They were, however, stripped of all their assets and even had to pay for all the repairs to the store.
The National Socialist Party "liquidated" or "Arianized" property owned by Jews, i.e. they instituted compulsory purchase orders enabling non-Jews to buy the property at outrageously low prices, and confiscated the wealth of the previous owners once they had fled abroad. Many people were involved in this process: the Munich "Arianization Office" run by Nazi Gauleiter Adolf Wagner proposed the liquidation of the Uhlfelder store at the Chamber of Industry and Commerce. The request was supported by interested parties in the retail sector and Munich's Mayor Karl Fiehler, and ultimately approved by the Third Reich's Minister of Commerce Hermann Göring. The warehouse passed into the possession of retailers, with the other properties handed to the Löwenbräu brewery – as a substitute for the Bürgerbräukeller beer cellar which had also been expropriated. All of these properties were "Arianized". During the air raids of 1944, the department store was severely damaged.
Having returned to Munich in 1953, Max Uhlfelder claimed compensation in over 100 civil suits – for the most part successfully. In 1954, the City of Munich bought the land on which the department store was situated. The building at Rosental 9 alone remained in the family's possession.