The future of German department store business Karstadt looks uncertain after parent company Arcandor said it was considering selling off some of its assets.
However, Arcandor has ditched plans to sell its majority stake in Thomas Cook after selling new shares to German bank Sal Oppenheim and increasing Arcandor’s capital.
This leaves its stake in Karstadt as its only remaining disposable asset. Speculation has increased that Arcandor is preparing to split up its Karstadt business, possibly by selling off divisions such as Karstadt Sports or its food, business or travel agency.
There is also speculation that an investor may pick up Karstadt and department store chain Galeria Kaufhof, which has been put up for sale by Germany’s biggest retailer Metro, and merge the two businesses.
Arcandor is understood to have had talks with UK department store chain Debenhams about a possible merger, but has so far been unable to find a suitable partner.
Arcandor had net financial liabilities of €1.5 billion (£1.16bn) at the end of June and is under pressure from banks to sell parts of the business.
Karstadt reported an EBITDA loss of €51 million (£39.5m) for the third quarter of the year.
It said that the department store’s business had been hit by low consumer confidence and inflation concerns. The company said it planned to increase margins to an acceptable level on the back of vigorous cost cutting.
Separately, high-end German fashion chain SinnLeffers has said it plans to cut about 1,000 jobs and half the size of its 47-store chain, as part of a restructuring intended to improve profitability.
The business, which has approximately 2,300 staff, has been hit by high rents and a drop in consumer spending and filed for insolvency in August.
SinnLeffers was sold off by Karstadt Quelle, now Arcandor, as part of a restructuring at the company three years ago.