BERLIN — A decision is nearing regarding both the sale of the insolvent Arcandor Group’s catalogue and mail-order division Primondo, and the fate of its challenged Quelle catalogue business, Arcandor said Thursday.
This story first appeared in the October 16, 2009 issue of WWD. Subscribe Today.
Klaus Hubert Görg, insolvency administrator for Quelle, said the fate of the bankrupt catalogue house would be decided by the end of the month. Quelle is regarded as the weak link in the Primondo deal, which also includes special catalogues such as Hess Natur and Baby Walz, and the TV shopping channel HSE 24. Speculation is growing the division may not be able to be sold as a whole, though this remains the official Arcandor strategy.
Declining to identify the bidders, Arcandor said four investors remain in the running, although press reports are that only three are now interested: Cerberus Capital Management LP, Golden Gate Capital, and Texas Pacific Group. The fourth, Sun Capital Partners Inc., which holds the majority stake in the former Arcandor catalogue Neckermann, has reportedly bowed out.
Regardless of who inks the deal, major cuts in the workforce will be made. Primondo has already said about 3,700 of 10,500 employees will be let go by Jan. 31 at the latest, and 2,500 employees received their notice last month. Arcandor said investors require improved factoring, logistic and IT contracts to be negotiated prior to any sale. This, a spokesman said, could “realistically” take place by the end of October or early November.
Meanwhile, little progress has been made in the sale of Arcandor’s Karstadt department store division. The Metro Group, which runs the competing Galeria Kaufhof Group and as early as summer 2008 expressed an interest in taking over up to 60 of the 90 Karstadt doors, indicated it is running out of patience. “Kaufhof can profitably grow without Karstadt,” Metro deputy board chairman Thomas Unger said in an interview this week. “We’re willing to wait, but not forever.”
Arcandor’s stock continues its steep decline. In three successive stages this month, private bank Sal. Oppenheim reduced its share from 24.9 percent to 9.69 percent, and is no longer Arcandor’s largest shareholder. Arcandor is trading at its 52-week low of 0.235 euros, or 35 cents at current exchange, down from 0.305 euros, or 46 cents, at Wednesday’s closing. One year ago, the share was trading at 3.85 euros, or $5.26.