BERLIN — The German district court in Essen has again extended the deadline for its ruling on the Karstadt insolvency plan to Sept. 3, providing private investor Nicolas Berggruen extra time to reach a final agreement with the Highstreet consortium over rents for 86 of the 120 Karstadt stores.
This story first appeared in the August 11, 2010 issue of WWD. Subscribe Today.
Berggruen, in a strategic partnership with the BCBG Max Azria Group, signed a purchase agreement for the insolvent department store chain on June 9, but has run into several snags in negotiations with Karstadt’s creditors.
The agreement with Highstreet regarding lowering rents is the last hurdle and has been agreed to in principle, but must be approved by all of Highstreet’s creditors to go into effect. Berggruen’s takeover bid and the Karstadt insolvency plan are contingent upon a rental agreement being signed. Karstadt employs 25,000 people in Germany.
Waiting in the wings, should negotiations fall through, is Italian retail mogul Maurizio Borletti, who submitted his own bid for the German department store group last week.
To date, both the Karstadt insolvency administrator Klaus Hubert Görg and the Karstadt creditors committee have declined to meet with Borletti, arguing they are legally bound to Berggruen’s offer.
Also on the scene is Metro chief Eckhard Cordes, who has once again expressed his interest in taking over some 45 to 60 of the Karstadt doors. The plan is to create one major German department store group incorporating these and Metro’s Kaufhof Galeria department stores.