BERLIN — Signa Retail GmbH, a subsidiary of Signa Holdings, is fully taking over the German Karstadt department store group from Nicolas Berggruen, the Austrian real estate group said Friday.
The deal, which comes into effect next week, involves no financial reimbursement to Berggruen Holdings. Signa Holdings already owns a 75.1 percent stake in the three Karstadt luxury department stores — KaDeWe in Berlin, Öberpollinger in Munich and Alsterhaus in Hamburg — the 28 Karstadt Sport stores and numerous Karstadt retail properties. In contrast to Signa’s previous call option on the remaining 83 Karstadt department stores, the new deal will give Signa 100 percent ownership of the 83-door chain as well as full ownership of the Karstadt Premium department stores and Karstadt Sport stores. The takeover must be approved by the antitrust commission.
Karstadt has been fighting for survival for over a decade. Berggruen bought the bankrupt group in 2010 for a symbolic euro, but has been under fire for not investing sufficiently in the struggling department store chain.
In 2013, the 83 Karstadt department store doors posted an operative loss of 124 million euros, or $164.7 million, and saw sales slip 6.8 percent to 2.7 billion euros, or $3.59 billion. All dollar figures are converted from the euro at an average exchange rate for the respective period.
Turnaround strategies have floundered and last July, new Karstadt chief executive officer Eva-Lotta Sjöstedt resigned after less than six months, hinting that she was not receiving full support from Berggruen.
Wolfram Keil, managing director of Signa Retail GmbH noted, “We are already widely involved with Karstadt, and so given the current situation, the complete takeover was the logical consequence.” As landlord of numerous Karstadt doors, Signa said it had assumed additional responsibility for the group in the last months, and had made a “substantial three-digit million investment” to support Karstadt’s liquidity.
Keil said it was now imperative for Karstadt to focus on the challenges at hand without further media exposure, and said no further reports on the group’s status and plans would be released in the coming months.
Sources close to Karstadt, however, suggested that of the current 83 Karstadt department store doors, only 55 to 60 will be deemed viable under the new management.
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