Retailer Arcandor in talks with rival Metro about possible tie-up

Stricken German retail giant Arcandor held talks on Sunday with rival Metro over a possible merger of their department store chains, after hopes of government aid looked dim, an Arcandor spokesman said.

Retailer Arcandor in talks with rival Metro about possible tie-up
Photo: DPA

The merger talks involved Arcandor owner Karl-Gerhard Eick and Metro chief Eckhard Cordes, along with representatives of the banks Sal. Oppenheim and Goldman Sachs, the spokesman told AFP.

German Chancellor Angela Merkel has expressed support for a merger solution to Arcandor’s financial crisis, hinting in the German press that the owner of the Karstadt department store chain, including Berlin’s iconic KaDeWe, should not count on a government bailout.

“I find it unacceptable that people call on the State for help when they themselves must do something,” Merkel told Bild.

Arcandor, which employs 50,000 people, has applied for €650 million ($930 million) in loan guarantees and a credit line of €200 million from Berlin out of a government fund to help companies hit by Germany’s worst postwar slump.

In addition to the department stores, Arcandor holds a 52-percent stake in Europe’s second biggest tourism group Thomas Cook.

Arcandor’s hopes for a bailout were further crushed Wednesday when the European Commission said it did not think Arcandor qualified for state aid since the company’s difficulties began before July 2008 and were not caused by the credit crunch.

Germany’s Economy Minister Karl-Theodor zu Guttenberg said the government had not yet taken a final decision on Arcandor’s fate.

The Verdi services union on Sunday called on Merkel’s government to save the retail group and put pressure on its management to save jobs.

“Bankruptcy cannot be avoided without immediate help from the federal government,” union leader Margret Moenig-Raane said in a statement. “This aid has to come on Monday,” she added as tens of thousands of Arcandor employees planned to stage protests across the country.

The merger of Arcandor’s Karstadt and Metro’s Kaufhof chains, which together have 200 department stores in Germany, would end a rivalry dating back to the 19th century.

Metro’s Cordes told the newspaper Bild am Sonntag that a merger would probably lead to a closure of around 40 stores in their two chains. “Our rescue plan shows that our long-term view would be some 160 department stores in Germany,” he told the paper.

The merger proposal put forward by Metro was initially opposed by Arcandor.

Europe’s retail sector has been shaken by the global economic crisis amid a collapse in demand, with the demise of British high street retailer Woolworth’s and century-old German department store chain Hertie.

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German Amazon workers strike on ‘Black Friday’

Amazon workers in Germany started a three-day strike Thursday timed to disrupt the online retailer's "Black Friday" sales bonanza.

German Amazon workers strike on 'Black Friday'
Signs for the Amazon strike in Leipzig. Photo: DPA

The strike, called by the powerful Verdi union, is set to last until Saturday and marks the latest escalation in a years-long battle with Amazon for better pay and working conditions.

“We estimate that around 2,500 people went on strike today, a higher number than in similar actions in the past and given the difficult circumstances caused by the pandemic, it's a big success,” a Verdi spokesman told AFP.

To limit the risk of Covid-19 infections, the union said it was not staging any rallies during the strike.

Amazon in a statement said the walkouts were not affecting customer deliveries since “the majority of employees are working as normal”.

The stoppage affected Amazon distribution facilities in Leipzig, Bad Hersfeld, Augsburg, Rheinberg, Werne and Koblenz.

Verdi has long wanted Amazon to sign on to regional wage agreements covering retail and e-commerce, and has organised numerous walkouts in recent years.

It also wants Amazon to improve health and safety at work, accusing the retail giant of not doing enough to protect staff from the coronavirus at some of its German sites.

Amazon defended its policies, saying it offered “excellent” wages, benefits and career opportunities in a “modern, safe” work environment.

The company employs more than 16,000 people in Germany and has taken on an additional 10,000 seasonal employees to cope with a boom in online shopping triggered by the pandemic.