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Arcandor at the brink, layoffs possible

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Arcandor at the brink, layoffs possible
Photo: DPA
12:52 CEST+02:00
Arcandor, the parent company of such German household names as Karstadt, the department store, and Thomas Cook, the travel agency, is at the brink of bankruptcy, Bild am Sonntag reported Sunday.

Chief Executive Officer Karl-Gerhard Eick told Bild the company is in a “tough position” because a €650 million loan must be refinanced in June and “less money is coming in that is going out.”

Eick, who was appointed to the top job in March, will present his plans for restructuring the company to the board of directors on Sunday. He did not rule out layoffs, though he said he hoped to keep job cuts to “as few as possible.”

Arcandor, the third largest company on the mid-cap MDAX stock index, employs 86,000 workers and reported almost €20 billion in revenues last year. The company's Karstadt department store division also includes world-famous stores such as KaDeWe in Berlin, the Alsterhaus in Hamburg and Oberpollinger in Munich. All three premium stores could also be put up for sale, Eick told Bild.

The company may appeal to the German government for aid, according to Eick. He argued Arcandor was a victim of both the economic and financial crisis because sales have dropped sharply due to the recession and the company is also struggling to refinance its debt at a time when banks have reduced lending.

 
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