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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.
