Montag, 15. Juni 2009

Karstadt's Rental Contracts

Some days ago, I argued that Karstadt's rental payments don't sound particularly eccessive.

However, Der Spiegel is now running a story claiming that rents on some properties are outrageous.

The article refers to a few department stores sold to an Oppenheim-Esch fund in which Middelhoff is a major investor.

Apparently, the guaranteed rent for one Munich location is 23.2 % of revenues, and a store in Leipzig is charged 19.6 % of revenues.

If this is true, then these figures do sound over the top: There is no way a department store can pay 23 % of revenues in rent, cover personnel and other costs on top, and still be profitable.

However, in terms of the overall finances of Karstadt and Arcandor, this is only about a very small portion (5 out of 100 department stores). By all means this should be investigated further (and state prosecutors have apparently started to look into the matter), but it won't make or break Karstadt's overall viability.


  1. But it makes it cheap to get out of the contract: Just stop selling and close the shop.

  2. I wonder if the contracts really specify a percentage of sales, or if they specify an amount, and somebody else calculated what it boils down to in % of actual sales.