Karstadt for sale
July 11, 2014
Ownership of Germany's loss-making Karstadt retail chain may soon change hands, Germany's mass-circulation daily Bild reported Friday. Karstadt's owner, Berggruen Holding, has been conducting talks with Austria's Signa investment group, the newspaper said, citing sources with in-depth knowledge of the matter.
According to Bild, US investor Nicolas Berggruen and Signa owner Rene Benko were weighing a deal giving Signa a 70 percent stake in Karstadt for just one euro ($1.36). Signa already owns majority stakes in Karstadt's sports outlets and two major department stores in Hamburg and Berlin.
Bild also speculated that the recent surprise resignation of Karstadt Chief Executive Eva-Lotta Sjöstedt was linked to the takeover talks.
On Monday, Sjöstedt announced she was stepping down with immediate effect, and implied that a lack of support from the Karstadt owner for her restructuring plan led to her resignation.
"After the experiences of the last few months and a thorough assessment of financial data, I've come to realize that basic conditions for my strategy no longer exist," she said in the statement.
In 2009, the German retailer had filed for bankruptcy protection. It was only rescued after Berggruen took over the company in 2010 - also paying a symbolic single euro for the company - and convinced its creditors to take a loss of two billion euros on their investment. In December 2013, Karstadt named Sjöstedt - a former IKEA manager - as CEO, saying her expertise could help the company regain profitability.
The fortunes of the retailer, which operates 83 stores across Germany, remained bleak, however. It has not regained profitability since Berggruen's takeover. In the first half of 2014, Karstadt's revenues fell 3.9 percent to 1.41 billion euros year-on-year, and the company lost 34 million euros.
uhe/nz (dpa, AFP)