page_title: Karstadt
section_title: Insolvency proceedings and the sale to Berggruen
hierarchical_section_title: Karstadt / History / Insolvency proceedings and the sale to Berggruen
caption_attribution_description: English: Karstadt in Kiel-Vorstadt Deutsch: Karstadt in Kiel-Vorstadt
context_page_description: Karstadt Warenhaus GmbH is a German department store chain whose headquarters are in Essen.
  Until 30 September 2010 the company was a subsidiary of Arcandor AG and was responsible within the group for the business segment of over-the-counter retail.
  On 9 June 2009 Essen District Court ordered provisional asset administration and protective measures in response to an application for the opening of insolvency proceedings. It also appointed a provisional insolvency administrator. The insolvency proceedings were opened on 1 September 2009. On 7 June 2010 the board of creditors resolved to sell Karstadt Warenhaus GmbH to the investor Nicolas Berggruen. Berggruen had taken over all Karstadt stores by 1 October 2010. This had been determined by Essen District Court on 3 September 2010. On 14 August 2014 it was announced that Karstadt had been completely taken over by Signa Holding of the Austrian investor René Benko, which already owned the majority of the sports shops and premium stores.
  Karstadt Warenhaus GmbH comprises 83 department stores, 4 bargain centres, 2 branches of K Town and the online shop karstadt.de. The 28 sports shops belong to Karstadt Sports GmbH.
context_section_description: Arcandor filed for bankruptcy on 9 June 2009. On 12 April 2010 the board of creditors agreed to the insolvency plan proposed by the insolvency administrator Klaus Hubertus Görg which envisaged a sale of the Karstadt department stores as a single entity to an investor and the waiver by the creditors of a large part of their demands. Some municipalities initially refused to agree to the required waiver of business tax payments. Four parties expressed interest in purchasing the Karstadt stores: the German-Swedish investor group Triton, Whitehall together with the Borletti Group and the German financial investor Nicolas Berggruen. Metro AG also expressed interest, but only in the acquisition of certain lucrative and strategically interesting Karstadt stores, which it intended to combine with its own Kaufhof stores into the “Deutsche Warenhaus AG”.
  On 7 June 2010 nine out of eleven votes were cast by Karstadt's board of creditors in favour of the Berggruen Holding – although the vote was subject to the closing conditions that the Highstreet consortium waived its demand for rental payments. Berggruen signed the purchase contract – primarily conditional upon an agreement with the principal landlord Highstreet – on 8 June 2010. €70 million was named as the purchase and investment price with a further €240 million to be invested in the following three years, for which Berggruen required no external capital. On 30 June 2010 the Federal Cartel Office approved the takeover of the department store chain. After tough negotiations, agreement with the Highstreet consortium regarding rental payments was reached in early September 2010.
  Berggruen announced the legal division of Karstadt into a parent company and three subsidiary companies in the sectors of sports, premium and other stores. Smaller business divisions were seen as easier to manage and could react more quickly. In addition to this, each division would find it easier to find strategic partners and cooperative ventures. Following an adjustment of the labour agreement covering the restructuring process, Berggruen's Plan was approved by the trade union Verdi.
  The logistics division of the company, KarstadtQuelle Beschaffungslogistik, continues to operate under the name Corporate Service (Germany) GmbH (CSG). The company offers international purchasing and, in particular, supply-chain solutions. The managing directors of CSG are Marc Baeuerle and Stefan Graetz and the headquarters are in Düsseldorf.
  Between 1 October 2011 and 30 September 2012 the group generated losses of €249.6 million, €121 million of which resulted from restructuring measures and, in particular, severance payments to 2,000 employees. In the first seven months of the subsequent trading year sales fell by 7.9%. All general, sports and premium stores were below projections.
  In May 2013 the company announced a “wage freeze” and, hence, a temporary suspension of the labour agreement until 2015.
  In September 2013 it was made known that Berggruen was selling 75.1% of both the premium and the sports stores to the Austrian Signa Holding of the investor René Benko. The revenue of 300 million euros was to be used to modernise the Karstadt stores. 150 million euros were available for the general Karstadt stores, of which 15 million should be invested within five years and the further 135 million euros as required. 100 million euros of this revenue from the sale were earmarked for the premium stores and 50 million euros for the sports stores. The 300 million was only to be paid in full within 18 months but half should be paid before the end of the year.
  In February 2014 Eva-Lotta Sjöstedt became the new managing director and successor to Andrew Jennings, who had been with Karstadt since the beginning of 2011. On 7 July 2014 the company announced the immediate resignation of Sjöstedt. In justifying her move she explained that "detailed checks, the experiences of the past few months and a closer knowledge of the economic situation have led me to conclude that the pre-conditions for the path chosen by me no longer exist".
caption: Karstadt department store in Kiel
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