BERLIN — The German state of Bavaria has agreed to grant financial aid to the struggling Quelle catalogue business, a subsidiary of the insolvent Arcandor Group.
This story first appeared in the June 22, 2009 issue of WWD. Subscribe Today.
In a meeting of the Bavarian cabinet late Thursday, Bavaria agreed to contribute 21 million euros, or $29.2 million, to a planned government guarantee of 50 million euros, or $69.5 million. Quelle is based in the northern Bavarian city of Fürth.
Quelle’s extremely precarious financial situation became apparent Thursday at the first press conference given by Arcandor’s temporary appointed insolvency administrator, Klaus Hubert Görg. He called Quelle’s situation “extremely complex” after Valovis Bank AG cut off factoring for the mail-order unit.
The company currently lacks the funds to print its fall-winter catalogue and to secure orders. Bavaria’s 21 million euros, or $29.3 million at current exchange, would cover the catalogue costs.
According to Görg, Arcandor’s Karstadt department store division, on the other hand, is sufficiently liquid to finance its summer and fall-winter business. He further noted June’s department store sales were ahead of last year’s and also ahead of plan. Figures are not available, as Arcandor for the third time postponed publication of its second-quarter results, which were due Thursday.