BERLIN — The insolvent German Karstadt Department Store Group is to be acquired by a partnership between private investor Nicolas Berggruen and BCBG Max Azria Group.
This story first appeared in the June 8, 2010 issue of WWD. Subscribe Today.
On Monday evening — almost exactly a year to the day since the German retail chain filed for insolvency — the Karstadt creditors committee chose the Berggruen-led consortium as Karstadt’s new owner.
Berggruen is the son of deceased German art collector and patron Heinz Berggruen and is founder and president of Berggruen Holdings, which has assets of more than $2 million, according to the company. In his bid to take over the 129-year-old Karstadt, Berggruen enlisted the strategic partnership of the BCBG Max Azria Group. Financial details of this joint venture have also not been revealed.
Max Azria, designer, chairman and chief executive officer of BCBG Max Azria, said, “We have a fantastic opportunity to turn around this business and make it the jewel of the German retail market.”
David Jehan, director of international operations for BCBG Max Azria, added: “We cannot wait to begin paving the new path we have dreamed of for Karstadt.”
Berggruen Holdings is based in New York with offices in Berlin, Mumbai, Istanbul and Tel Aviv. The 26-year-old group has worldwide interests in real estate, renewable energy and private investments in creative fields.
The labor union Verdi openly favored Berggruen among the bidders, saying his offer was the most attractive in terms of its long-term perspectives and financing. Berggruen was the one investor whose plan reportedly didn’t include further cuts in — or concessions from — Karstadt’s 25,000 strong workforce.
Berggruen Holdings won out over the Highstreet consortium, which owns 86 of the Karstadt store properties and represents the combined interests of Goldman Sachs, which owns 51 percent of the consortium, along with Deutsche Bank, Pirelli Real Estate, Generali Insurance and Italian department store mogul Maurizio Borletti, and the third official bidder, the German-Scandinavian private equity firm Triton.
An official offer from Russian investor Artur Pakhomov, who emerged as a potential buyer last week, was never submitted, according to the insolvency administrator’s office. Also on the sidelines was the Metro Group, which runs the competing German Galeria Kaufhof department store chain, which has 113 units and had long expressed interest in taking over some — but not all — of the Karstadt doors.
This ends a year-long search to find a buyer for the entire 120-door Karstadt. At the end of Monday’s more than 10 hour meeting of the 11 member creditors committee, insolvency administrator Klaus Hubert Görg said a contract would be signed as soon as possible. Details of the deal were not disclosed.