Closing time

Creditors decided on Wednesday to pull the plug on Hertie, one of Germany's oldest retail chains, putting 2,600 employees out of work.

By a margin of more than 80 percent, creditors voted overwhelmingly to shut down the 54-store chain.

The vote came after potential investors pulled out when they couldn't come to an agreement over rental costs for the Hertie stores with the current owners, British private equity fund Dawnay Day.

"The staff are shocked," said the company's chief labor representative, Bernd Horn.

There was no chance of keeping the company going, according to bankruptcy administrator Biner Baehr. He laid the blame on MABV, an Anglo-Dutch real estate fund that owns the chain and the freeholds. Baehr said that attempts to negotiate cheaper leases had been futile.

MABV said Baehr's charges were groundless.

The Essen-based chain had been experiencing financial difficulties since before the recent global economic downturn and had already filed for bankruptcy protection in July 2008.

Dawnay Day bought the Hertie from the KarstadtQuelle group, now known as Arcandor, in 2005. It had hoped to revive the famous German brand.

Hertie was one of Germany's oldest retail chains. It was founded in 1882 by Hermann Tietz, who combined both his first and last name to come up with the name Hertie. The company grew steadily until at one point it employed over 32,000 staff. It survived both world wars and had been an institution in Germany.

av/Reuters/dpa/AP/AFP
Editor: Nancy Isenson