Jun 17, 2009
Retailer Arcandor unveils insolvency of 15 units
Jun 17, 2009
BERLIN (AFP) - The German retail and tourism group Arcandor, which declared insolvency last week, said Wednesday 17 June that 15 subsidiaries employing 6,700 people were also unable to meet their payments.
Karstadt employees protest against the Arcandor insolvency in Munich, June 10, 2009 - Photo: REUTERS/Alexandra Beier
The British travel group Thomas Cook, in which Arcandor owns a stake of almost 53 percent, was not one of the units concerned, however.
The affected operations are service providers that work almost exclusively for Arcandor's department store chain Karstadt and mail order companies Quelle and Primondo, a statement said.
The 6,700 staff affected by the decision announced Wednesday 17 June come on top of 43,000 whose posts are already at risk, but it was not sure all would lose their jobs.
Salaries for the 6,700 would be paid through the month of August, the statement said, and talks are being held with the biggest German retailer, Metro, which might buy some Karstadt stores and retain part of its workforce.
German Chancellor Angela Merkel told the German industrial federation BDI on Tuesday 16 June that "insolvency does not have to mean that the company or jobs... will disappear."
Thomas Cook, meanwhile, has been insulated from the turmoil at Arcandor, and jobs there are not believed to be at risk.
On Wednesday 17 June, the dominant Arcandor investor, investment bank Sal Oppenheim, said it had sold its own 3.7 percent stake.
Oppenheim added that it had not yet decided whether to sell a further 24.9 percent of the shares owned by its industrial holding company in Arcandor.
Arcandor shares showed a loss of 0.15 percent to 0.68 euros in afternoon trading on the Frankfurt stock exchange, while the MDAX index on which they are listed was off by 1.33 percent.
The group's other major shareholder, billionaire Madeleine Schickedanz, has already said she does not plan to sell her 26 percent holding.
On Tuesday 16 June, the retailer said it had cancelled its first-half report owing to the insolvency proceedings.
An administrator named to manage the proceedings is to present an initial evaluation of the situation on Thursday 18 June.
Arcandor has had problems for several years and has suffered from allegedly dubious managment practices. It filed for insolvency on June 9 after the German government rejected pleas for credits and loan guarantees.
Authorities point out that the group's problems pre-date a July 2008 deadline under which companies can qualify for aid under a special government fund established to help firms threatened by the global economic crisis.
-- Dow Jones Newswires contributed to this report --
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