Karstadt soon down to 120 sports and department stores

01.12.2009

[] Germany's leading retailer faces insolvency plan / Seven locations to be consolidated, three discontinued in spring 2010 / Investor process initialised

The insolvency administration and management of Karstadt Warenhaus GmbH have informed employee representatives and staff that 86 department stores, 26 sports outlets and 8 bargain centres with over 25,000 jobs nationwide are set to remain open under the company's insolvency plan. Appropriate key points had been agreed with the lessors this week. Suppliers, service providers and staff had already agreed their contributions to the company's rehabilitation last week.

"The department stores in Celle, Dortmund, Hamburg, Hanover, Kiel, Munich and Recklinghausen will all be consolidated," Rolf Weidmann, Karstadt's administrator responsible for the department store sector, explained. "In spring 2010, we will effectively have to discontinue the three locations in Kaiserslautern, Ludwigsburg and the department store in Hanau."

Seven Karstadt locations to be consolidated

In more concrete terms this means that individual outlets at locations with several Karstadt stores will close by 31 March 2010. This will affect the sports and multimedia store in Celle (54 employees), the Technology Centre in Dortmund's Kampstrasse (157 employees incl. catering), Karstadt in Hamburg's Elbe Centre (105 employees), the Living outlet in Hanover (147 employees), the "Alter Markt" store in Kiel (155 employees incl. catering), the "Haus am Dom" store in Munich (157 employees), and the sports outlet in Recklinghausen (17 employees).

A reconciliation of interests and social compensation plans will be discussed in talks to be commenced for these stores, some of which had already been specified at the creditors' meeting on 10 November 2009. In addition to offering a transfer company, the talks will also consider the option of new roles for individual staff in the stores that will remain open.

Discontinuation of three locations

Following a thorough review of their economic efficiency and talks with lessors, Karstadt will have to discontinue three locations in spring 2010: Kaiserslautern im Fackelrondell (191 employees incl. catering), Ludwigsburg Marstall (109 employees incl. catering), and Hanau Freiheitsplatz (85 employees – the Hanau sports store at Kurt-Blaum-Platz will remain open).

Almost 1,200 employees in total will thus be affected by this decision.

Weidmann stressed that "The contributions of the various creditor groups to the company's rehabilitation allow us to keep some of the stores in Germany that had originally been on our review list. These stores employ a total of over 1,700 staff."

Karstadt restructuring, insolvency plan and investor process

"After stabilising operations and the institution of insolvency proceedings on 1 September 2009, we have held talks with the various creditor groups," Weidmann said. "Customers of Karstadt will find all stores with a Christmas offer that is as extensive as it is attractive – especially that of the market leader in the sports segment, of Living, Personality and, of course, Fashion."

The shopping experience at Karstadt will be rounded off by 148 restaurants and cafés of the "Le Buffet" catering service and 51 "Perfetto" delicatessen, Weidmann continued.

"Based on the decisions announced today, we will now work out an insolvency plan and actively pick up the investor process," Weidmann confirmed. Both processes could be successfully concluded by spring 2010, while the implementation of structural and operative restructuring measures would continue rigorously.

"Our reorganisation and restructuring measures are, first and foremost, result-oriented, not focused on sales. Once we have utilised the restructuring options available under the insolvency Code, we will target the broad mid-range segment with optimised offers and optimised space," Weidmann outlined the further action.

120 stores to continue

The premium stores will remain a firm element in Karstadt's concept: the Alsterhaus in Hamburg, the KaDeWe in Berlin, and the Oberpollinger store in Munich are due to continue business.

The following Karstadt department stores will in future mix with the competition: Augsburg, Bad Homburg v.d. Höhe, Bamberg, Bayreuth, Berlin (Charlottenburg, Kreuzberg, Kurfürstendamm,

Spandau, Steglitz, Tempelhof, Wedding), Bielefeld, Bochum, Bonn, Bottrop, Braunschweig, Bremen, Bremerhaven, Celle, Cologne, Constance, Darmstadt, Dessau, Dortmund, Dresden, Düsseldorf, Duisburg, Erfurt, Essen, Esslingen, Flensburg, Frankfurt a.M. (Zeil), Freiburg im Breisgau, Fulda, Giessen, Goslar, Göttingen, Gummersbach, Gütersloh, Hamburg (Mönckebergstrasse, Bergedorf, Billstedt, Elmsbüttel, Harburg, Wandsbek), Hanover, Iserlohn, Karlsruhe, Kiel, Landshut, Leipzig, Leonberg, Limburg (Lahn), Lörrach, Lübeck, Lüneburg, Magdeburg, Mainz, Memmingen, Mönchengladbach, Mülheim, Munich (Am Nordbad, Bahnhofplatz, Olympiazentrum, Schwabing), Münster, Neumünster, Norderstedt, Nuremberg (Lorenzkirche, Langwasser), Offenburg, Potsdam, Recklinghausen, Rosenheim, Saarbrücken, Siegen, Singen (Hohentwiel), Stuttgart, Sulzbach, Trier, Viernheim, Wiesbaden, Wismar.

Karstadt sports stores: Berlin (Kranzler Eck, Steglitz), Braunschweig, Bremen, Cologne, Constance, Dortmund, Dresden, Düsseldorf, Erfurt, Essen, Frankfurt a.M. (Nordwestzentrum), Göttingen, Hamburg (Mönckebergstrasse, Harburg, Wandsbek), Hanau, Hanover, Karlsruhe, Kiel, Lübeck, Munich (Oberpollinger), Münster, Rosenheim, Stuttgart, Wildau.

In addition, the following bargain centres will stay open: Berlin-Neukölln, Bochum, Frankfurt (Oder), Giessen, Hoyerswerda, Ludwigshafen, Paderborn, Rosenheim.

The closure of the multimedia discount stores in Berlin-Biesdorf, Braunschweig and Stuttgart had already been announced at the creditors' meeting on 10 November 2009.

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