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Arcandor needs cash
By George Frey |
April 21, 2009, Tuesday
|
Print Edition
Print Edition
STRUGGLING German retailer Arcandor AG said yesterday that it could need 900 million euros (US$1.2 billion) in new loans as it forges ahead with massive restructuring and is considering shuttering or selling 1,600 stores.
The company said it was looking at new bank loans and possible government assistance to come up with the money in the next five years in addition to the refinancing of 630 million euros in other loans in June.
"At present, the refinancing plan for Arcandor is essentially based on further bank loans. However, the group is also examining options for state support," the company said in a statement. "Initial exploratory talks with representatives of the federal government and the respective regional governments have been conducted."
In February Arcandor AG reported that net losses increased 53 percent in its fiscal first quarter and said its outlook was uncertain given the global financial meltdown.
The company is in the middle of a multi-year restructuring to concentrate on its core businesses of Karstadt department stores, Primondo mail order and its Thomas Cook travel business.
Over the past five years, it has cut staff and ridded itself of interests ranging from stakes in Starbucks Coffee in Germany, a chain of golf specialty stores and a sports television station.
The Karstadt brand has 81 department stores and 27 sporting goods stores.
Arcandor said on Monday that a further 1,600 Quelle retail stores, which sell household goods, could also close or go on the block. Chief Executive Karl-Gerhard Eick said some 12,500 of the company's 86,000 employees could be affected.
The company said it was looking at new bank loans and possible government assistance to come up with the money in the next five years in addition to the refinancing of 630 million euros in other loans in June.
"At present, the refinancing plan for Arcandor is essentially based on further bank loans. However, the group is also examining options for state support," the company said in a statement. "Initial exploratory talks with representatives of the federal government and the respective regional governments have been conducted."
In February Arcandor AG reported that net losses increased 53 percent in its fiscal first quarter and said its outlook was uncertain given the global financial meltdown.
The company is in the middle of a multi-year restructuring to concentrate on its core businesses of Karstadt department stores, Primondo mail order and its Thomas Cook travel business.
Over the past five years, it has cut staff and ridded itself of interests ranging from stakes in Starbucks Coffee in Germany, a chain of golf specialty stores and a sports television station.
The Karstadt brand has 81 department stores and 27 sporting goods stores.
Arcandor said on Monday that a further 1,600 Quelle retail stores, which sell household goods, could also close or go on the block. Chief Executive Karl-Gerhard Eick said some 12,500 of the company's 86,000 employees could be affected.
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