BERLIN — A day after being turned down for both federal aid and a government-backed emergency credit, Arcandor Group on Tuesday filed for bankruptcy.
The department store, catalogue and travel group filed for bankruptcy protection in a district court in its headquarter city of Essen, Germany. The filing affects the department store division Karstadt Warenhaus GmbH, the catalogue division Primondo GmbH as well as Quelle GmbH, but not the Thomas Cook travel group, in which Arcandor holds a partial stake, or the home shopping channel HSE24.
Late Monday, Arcandor said it was meeting with its main shareholders — the private bank Sal. Oppenheim and Madeleine Schickedanz, the major house banks and landlords of the Karstadt department stores — to work out an improved rescue and restructuring plan by Tuesday noon so it could reapply for emergency credit. The government had pressed for greater involvement on the part of the major shareholders and banks in saving the group.
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Arcandor decided not to make a second application with the government-owned KfW bank, suggesting the primary parties could not come to an agreement over their rescue plan roles. The group has repeatedly said it would face insolvency if it did not get federal aid by June 12, when a bank credit of 710 million euros, or $979.8 million at current exchange, falls due.
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Arcandor employs 68,283 worldwide, and about 55,000 in Germany. Arcandor said about 43,000 workers in Germany would be affected by the bankruptcy.
In addition to 127 Karstadt and Karstadt Sport stores, the group is comprised of the Primondo catalogue division, which includes Quelle, Hess Natur, Baby Walz and more than 15 other specialized catalogue and home shopping businesses, and Thomas Cook, in which it holds a 52 percent stake.
Arcandor said all divisions would remain in operation during the bankruptcy proceedings. Chief executive Karl-Gerhard Eick stated, “We will continue to fight to retain as many jobs and locations as possible.” An interim insolvency administrator is expected to be appointed as early as today.
A timetable for further meetings between Metro and Arcandor over a possible merger of Metro’s Galeria Kaufhof and Arcandor’s Karstadt department stores has not been set. However, Metro reiterated its interest in integrating about 60 of the 90 Karstadt stores into its Galeria Kaufhof network.
Toward the end of trading Tuesday, Arcandor’s shares had fallen 53.3 percent to 0.58 euros, or 80 cents