Austrian fully owns department store group Karstadt

Austrian fully owns department store group Karstadt

Austrian real estate investor René Benko will become the new owner of onerous German warehouse group Karstadt. The sale of the 83 stores has rekindled a rumour of a merger with Metro subsidiary, Kaufhof, which is also for sale.

Symbolic euro

René Benko, 37, will buy the German department store group (founded in 1881) off of billionaire Nicolas Berggruen, who bought Karstadt in 2010. It belonged to the Arcandor concern, but Berggruen bought it for a symbolic euro.

 

Only a month after CEO Eva-Lotta Sjösted left the company, it has now been sold. She left after 5 months in charge because she felt Berggruen did not free enough means to carry out the changes she wanted to implement.

 

René Benko, who is currently dealing with a corruption trial in Italy - already took control of Karstadt's three "premium stores" (like the famous KaDeWe in Berlin) and its 28 sports stores. He paid 300 million euro for the purchase and negotiated an option for the rest of the group for a symbolic euro.

 

120 million euro loss

Karstadt has been considered stale and corny and has failed to counter the fast fashion competitors like H&M, Zara and Primark. It has also failed to deal with the e-commerce threat, resulting in a 120 million euro loss last year.

 

Its prior owner cut 2,000 jobs (out of 19,000) and "froze" wages for the remaining employees until the end of 2016. It is unclear how the new owner sees the future of the department store group, but he has promised to stay on board for at least 10 years. Analysts fear that Benko will close down 15 to 20 onerous department stores.

 

He already wanted to buy Metro's Kaufhof department stores back in 2011, but the deal never materialized. German media have now breath life in the possible Kaufhof-Karstadt merger because of the Karstadt purchase.

Questions or comments? Please feel free to contact the editors


EU guidelines on food donation helpful to reducing food waste

20/10/2017

(Content provided by EuroCommerce) The European Commission adopted yesterday on the World Food Day, EU guidelines on food donation. Retailers and wholesalers welcome these guidelines as supporting efforts to recover and redistribute food to those in need.

Small growth for Metro in 2016/2017

20/10/2017

Metro’s preliminary results show that the German retailer has achieved a 1.6 % growth in its 2016/2017 fiscal year. Even on a like-for-like basis, there was still a slight growth: Metro itself considers it to be a successful year.

Tepid summer leads to weaker ice cream sales for Unilever

19/10/2017

The past summer was not one with a lot of hot days and that has had its effect on Unilever’s ice cream sales. The division’s sales therefore slumped 6.7 %.

Danone alters management structure

19/10/2017

Danone has decided to alter its board structure. The position of chairman and CEO are now both occupied by current CEO Emmanuel Faber.

Difficult third quarter for Carrefour

18/10/2017

Carrefour’s quarterly results illustrate the major challenges the current CEO and his team face, especially in Western Europe. Belgian like-for-like turnover also dropped.

Sainsbury’s will cut 2,000 jobs

18/10/2017

British supermarket chain Sainsbury’s is to cut about 2,000 jobs in the United Kingdom, aiming to save up to 500 million pounds (560 million euro) in an attempt to compete with discounters.

Back to top