KarstadtQuelle strikes deal over rescue plan

14th October 2004, Comments 0 comments

14 October , ESSEN - The management of ailing German retailer KarstadtQuelle and union negotiators reached a breakthrough Thursday after marathon talks on a rescue package. Company spokesman Joerg Howe said agreement had been reached after 29 hours of talks between the two sides on a massive overhaul of the retail giant, which is also Europe's biggest department store. Details of the agreement were to be released by negotiators later in the day. Hinging on the outcome of the talks were major new loans to

14 October

ESSEN -  The management of ailing German retailer KarstadtQuelle and union negotiators reached a breakthrough Thursday after marathon talks on a rescue package.
Company spokesman Joerg Howe said agreement had been reached after 29 hours of talks between the two sides on a massive overhaul of the retail giant, which is also Europe's biggest department store.

Details of the agreement were to be released by negotiators later in the day.

Hinging on the outcome of the talks were major new loans to the company by banks and shareholder approval of a EUR 500 million capitalisation increase in order to underwrite the costs of the reorganization.

KarstadtQuelle's supervisory board began meeting Thursday to discuss the launch of the envisaged capitalisation increase.

Faced with stagnating consumer demand in Germany and having not followed rivals into forging new overseas market, there had been warnings that failure to secure the rescue package could result in the group being forced to file for insolvency.

A household name in Germany, Karstadt has also announced plans to reverse recent moves to diversify its operations and try to refocus on its core activities.

This includes hiving off about half of its 181 stores, shutting down about 300 speciality shops, pulling out of fitness centres and catering as well as disposing of its real estate company and its logistics business.

Besides that, employees are to give up five vacation days a year and move towards a 42-hour working week. The unions warn that about 20,000 jobs are at stake in the restructuring.

[Copyright DPA with Expatica]

Subject: German news 

0 Comments To This Article