Donnerstag, 28. Mai 2009


I don't normally read the business section of the Sueddeutsche.

But today I happened to take a peek, and stumbled over a commentary entitled "A chance for Karstadt: Arcandor is more important than Opel, and there are reasons for government support".

So I took a closer look to learn what those reasons are:

- The first reason is that Karstadt alone already provides jobs for "more than 50,000 people", twice as many as Opel does. I see.

(I wonder if I should be finicky enough to mention that according to the interim financials, Karstadt had 23,627 staff as of 31/12/08 based on "full-time equivalents". 330 head-office staff will be retrenched until May, and there is a gradual head-count reduction in the department stores. So by now, they are probably below 23,000.)

- The second reason: In many small and mid-sized cities, Karstadt department stores are anchors preventing a "domino effect". If Karstadt stores - "essential inner-city magnets" - close their doors, German inner cities might turn into "American-style wastelands". In other words: If people can no longer shop at Karstadt, they will shop nowhere else either. In particular, inner-city pharmacies, bakeries and restaurants will have to close down. I see. Maybe government subsidies for those pharmacies, bakeries and restaurants are also called for? Just an idea.

- Thirdly, it is not clear that the "traditional department-store concept" has no future. No, "some people" actually see potential, because "some customers" like the Karstadt concept involving "everything under one roof with competent sales staff". And because of this convenient fact that "some people" actually like to shop at Karstadt, the amount of money needed to rescue Arcandor is much smaller than for Opel. I see.

- Point four: Arcandor is only in existential trouble due to the banking crisis. This is not explained further, but I guess the implied idea is that healthy banks would not hesitate to provide Arcandor with more money. I see.

- And finally: Metro's offer to merge Karstadt into Kaufhof is "bad style" because it involves "getting the assets at a cheap price and picking raisins". In other words: Instead of letting Kaufhof take over Karstadt with no taxpayer money involved, the taxpayer should help Arcandor with a 650 m € guarantee and a 300 m € KfW loan to avoid that Metro gets a good deal. I see.

Conclusion: I knew there was a reason why I don't normally read the Sueddeutsche's business section...

(By the way: Most Karstadt locations were sold to a Goldman Sachs real estate fund a few years ago. I wonder how much rent Karstadt is paying...?)

(Previous post on Arcandor)


  1. Subsidies for restaurants are already on the table: Doesn't the CSU want to reduce the Mehrwertsteuer for restaurant meals to 7 %?

  2. I remember a time that people were against the Karstadt type of shopping centers, because they were said to destroy the small shops in the city centers. How come that Karstadt both destroys and feeds them?

  3. well, Sueddeutsche really sucks....They had their best time when the "Amigos" around FJ Strauss ruled this one-party state as they were the only bigger left-wing newspaper that could launch the delicate stories about FJ without being shut down by any of his various amigos in justice or administration...
    Karstadt was finally killed by T.Middelhoff, who sold the buildings and concluded leasing deals which forced Karstadt to pay up to 20% of its turnover, independent from actual profits... Sounds weird, but is true.. Maybe he was not stopped because Middelhoff always smiled like he was the sun himself?

  4. @verlorenegeneration

    My Mum lives in a mid-sized Bavarian provincial town (population 50,000), the kind of town the Sueddeutsche is probably refering to. Interestingly, Hertie decided to open a new department store there late last year. My Mum went there with a friend and told me: "The store really sucks. The merchandise is uninspiring, and there are hardly any customers. They'll close down soon, I'm sure."

    (For non-German readers: The Hertie brand name used to be owned by Karstadt/Arcandor. They sold it together with most mid-sized department stores to a British private equity investor some years ago. Hertie has entered insolvency procedures a few months ago, and as far as I know, the search for an investor has failed, and the administrator is in the process of closing the company down.)


    I can't stand Middelhoff, and don't know anybody who does. His announcements always promised the moon, but turned out to be nothing more than hot air. But apparently he charmed old Ms. Schickedanz with his captivating smile, and that was enough to land him the job at Arcandor...