Mentioning high traffic and good results during the Christmas selling season, Karstadt announced this week a major “Sparstadt” campaign (spar is German for saving) for its end-of-season sales, backed for the first time by TV advertising. Discounts of 30 percent are being granted on Adidas and Nike products as well as on winter sports items. The discount reaches 50 percent for pullovers and some home textiles.
A spokesman for Görg, the trustees who are overseeing the bankruptcy of Arcandor’s sports retail and department store business, was quoted last month by the Textilwirtschaft magazine as saying that these operations have become profitable since the insolvency proceedings began last June. He said that all the 25,000 remaining jobs within the Karstadt group would be saved if the Christmas business went well.
The trustees have decided to leave open 86 department stores, 26 sports superstores and eight factory outlets. Only 13 more loss-making stores are being closed down, including a sports store in Recklinghausen and a sports and multi-media branch in Celle. As previously reported, three new Karstadt Sports stores have been opened in recent months.
Negotiations are being held with the landlords of Karstadt’s stores to reduce the rental fees. Suppliers previously agreed to deliver the goods ordered for the season in return for a guarantee of payment within 23 days. Employees agreed to give up Christmas and holiday bonuses, which will allow the group to save €150 million over the next three years.
The number of candidates for the acquisition of Karstadt has risen to a couple of dozen. The trustees still hope to sell Karstadt as a going concern by the second half of 2010. They continue to exclude a possible merger with Metro and its Kaufhof subsidiary. The proceeds from the sale will help to pay off some of the debts of €2.6 billion owed to Karstadt’s 40,041 creditors.
