Deal to keep Karstadt alive moves closer

The prospects for 25,000 employees at the beleaguered department store chain Karstadt are looking brighter after it emerged Thursday night that negotiators were close to striking a deal on reduced rent on the chain’s properties.

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The month-long drama was set to end after Nicholas Berggruen, the billionaire investor planning to take over the company, announced Thursday night that a deal had been struck with the real estate consortium Highstreet over the rent on Karstadt’s 120 properties.

The deal brings Berggruen’s purchase of the firm, which declared it was insolvent last year, a step closer, bringing further hope that Karstadt will not need to be liquidated.

“Everything that needed saying has been said,” Berggruen told employees at a Karstadt store on Berlin’s Kurfürstendamm. “But the signatures have to be gathered. Only then will we be ready.”

The future of Karstadt’s 25,000 employees in Germany has been in doubt since the company became insolvent in the summer of 2009 when its parent company, retail and tourism giant Arcandor, went bust.

Sources close to the negotiations told news agency DDP that the only thing left was “one of the signatures that counts” and that it was “realistic” that the matter would be dealt with by the Essen administrative court – which has been handling the dispute – before midday.

The Highstreet partnership, which is Karstadt’s biggest landlord, said its creditors had approved new rental conditions for the retailer at a meeting Thursday in London, according to news agency Bloomberg.

The court deadline for the completion of the Karstadt takeover ends Friday.

Insolvency administrator Klaus Hubert Görg and Labour Minister Ursula von der Leyen also expressed optimism.

“As yet the agreements are not all signed and confirmed … but we’re getting to the point where we can reasonably have hope that it won’t come to a liquidation of Karstadt,” von der Leyen said.