The German department store chains Karstadt and Kaufhof have finally tied the knot. After months of negotiations, the banks have given their blessing. However, there is no question of a romantic honeymoon: 5 000 jobs will be cut.
Symbolic victory for Karstadt
Karstadt and Kaufhof, Germany's last major department store chains, will continue together. The merger had been in the air for a long time and it almost fell through, but now the banks have given their approval, German newspaper Süddeutsche Zeitung writes. It will not be a marriage of equals: Karstadt-owner Signa has a symbolic majority in shares of 50.01 % in the joint venture. According to insiders, the agreement will be signed on 15 September.
Of the 20,000 jobs in the new merger company, 5,000 will be cut immediately and the remaining employees fear worse working conditions and restructuring rounds.
Kaufhof itself is said to have been on the verge of bankruptcy, Süddeutschen Zeitung reports. The department store chain has suffered increasing losses since it was taken over by Canadian Hudson's Bay. Unconfirmed rumour has it, that the banks therefore demanded the entire management of the merger company to come from Karstadt circles: the new CEO will be Stephan Fanderl, a former CEO of Karstadt who is now active at parent company Signa. CFO Miguel Müllenbach is also assured a position.