Retailer Hertie files for insolvency
AFP · 31 Jul 2008, 15:49
Published: 31 Jul 2008 15:49 GMT+02:00
Hertie, which employs about 4,000 people in 72 stores, mentioned the "situation that is also tense" at Dawnay Day in explaining that it could not come up with the funds to continue operations. All plans to restructure the chain had failed, it added.
Hertie has existed for more than a century in Germany, but consumer spending has been sluggish for several years. On July 13, the Financial Times reported that privately owned Dawnay Day had put its investment banking division up for sale as it sought to raise cash
following heavy losses on investments.
A string of quick sales had raised concerns the financial group had become a victim of an international credit squeeze, the newspaper said. It quoted a source as insisting that none of the group's businesses were in administration but added that "is is expected that more companies and holdings will be put up for sale."
Dawnay Day bought the Hertie stores in 2005 from the KarstadtQuelle group, which has since been renamed Arcandor.