Court approves Karstadt deal, saving 25,000 jobs

The future of Germany's Karstadt, Europe's third-largest department store chain, appeared to be secured Friday as a court approved its acquisition by a billionaire investor, safeguarding 25,000 jobs.

Court approves Karstadt deal, saving 25,000 jobs
Nicolas Berggruen addresses journalists. Photo: DPA

A court in Essen, western Germany that has been overseeing months of wrangling over the rent to be paid for 120 Karstadt stores, agreed that investor Nicolas Berggruen could snap up the iconic chain, saving it from bankruptcy.

The court said in a statement it had “approved the insolvency plan for Karstadt.”

“This is just a beginning. We all need to work together,” Berggruen told reporters, adding: “I am working for you and for the future of Karstadt.”

The High Street consortium of property developers, Karstadt’s main landlord, agreed Thursday to lower its rental for the stores, removing a difficult stumbling block to a deal.

The path is now clear for the 49-year-old Berggruen to acquire the chain. Son of famous art collector Heinz Berggruen, he was born in Paris but has dual German and US citizenship and studied in Britain and the United States.

He owns a string of assets from Turkey to Cambodia and his international lifestyle, hopping from country to country by helicopter and staying in luxury hotels, prompted the Wall Street Journal to dub him the “homeless billionaire.”

Karstadt, a venerable German chain founded in 1881 and which includes the famous Berlin department store KaDeWe, has faced bankruptcy since 2009 after years of erratic management.

It has also suffered from Germans’ reluctance to spend, doubts over its future and the fact that people are deserting the department store model for shopping.

Found in almost every major German city, Karstadt is third in the list of European high street department store chains, behind Britain’s Marks & Spencers and Spanish group El Corte Ingles.

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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.