Now Reading:

Germany's Arcandor goes bust


Germany's Arcandor goes bust


German retail group Arcandor has filed for insolvency after the Berlin government rejected its request for emergency state aid.

It is unable to repay borrowings of 710 million euros due by the end of the week. The court filing covers its Karstadt department stores as well as its Primondo and Quelle mail-order businesses. The travel agent Thomas Cook – in which Arcandor holds a majority stake – is not affected. Spokesman Gerd Koslowski stressed that all of the company’s businesses remain open for the moment while a court appointed insolvency administrators helps with a restructuring plan. German Chancellor Angela Merkel – who was criticised by some in her party for using taxpayer money to rescue car maker Opel – decided there was not enough public support to bail out Arcandor. “We have always said that an insolvency filing can be an opportunity to reshape the company, put it on a new footing and open up new business opportunities. The government will support that process as much as it can,” Merkel said: The jobs of as many as 43,000 workers are now at risk. Karstadt, which dominates German high streets, has 116 department and sporting goods stores. Rival retailer Metro has indicated it would be interested in taking over about 60 of them.
Next Article