Karstadt chain faces overhaul

The Karstadt supervisory board is set to announce a new restructuring blueprint for the 133-year-old retail group towards the end of this week. Management declared that there would be no taboos in seeking to push the company back on the path of profit.

Austria's Signa Group had confirmed it was taking over the floundering German retailer from billionaire investor Nicolas Berggruen after the latter failed to put Karstadt back on track in the country's intensely competitive retailing business.

Signa said Berggruen, who bought Karstadt in 2010, would completely hand over ownership of the department store chain to Austrian investor Rene Benko.

Symbolic one-euro deal

There was no transaction price involved in taking over all of the company's 83 stores and no money would change hands, it maintained.

The group's CEO, Wolfram Keil said Karstadt's current situation was difficult.

"In the face of the problems at hand, it's now important to make calm decisions with a view to getting the chain back on track again," he said.

Occupying prime sites in Germany's main shopping centers, Karstadt had in recent years battled falling sales as well as criticism of what pundits called its out-to-date retailing style. In particular, the chain had been attacked for failing to attract younger shoppers and for not producing a successful model for online shopping.

A deal had been #link:17764664:in the works for months for Karstadt, which employs some 17,000 people. The takeover has still to be scrutinized by anti-trust authorities.

cjc/hg (Reuters, AFP, dpa)