Retailer Arcandor in talks with rival Metro about possible tie-up

Stricken German retail giant Arcandor held talks on Sunday with rival Metro over a possible merger of their department store chains, after hopes of government aid looked dim, an Arcandor spokesman said.

Retailer Arcandor in talks with rival Metro about possible tie-up
Photo: DPA

The merger talks involved Arcandor owner Karl-Gerhard Eick and Metro chief Eckhard Cordes, along with representatives of the banks Sal. Oppenheim and Goldman Sachs, the spokesman told AFP.

German Chancellor Angela Merkel has expressed support for a merger solution to Arcandor’s financial crisis, hinting in the German press that the owner of the Karstadt department store chain, including Berlin’s iconic KaDeWe, should not count on a government bailout.

“I find it unacceptable that people call on the State for help when they themselves must do something,” Merkel told Bild.

Arcandor, which employs 50,000 people, has applied for €650 million ($930 million) in loan guarantees and a credit line of €200 million from Berlin out of a government fund to help companies hit by Germany’s worst postwar slump.

In addition to the department stores, Arcandor holds a 52-percent stake in Europe’s second biggest tourism group Thomas Cook.

Arcandor’s hopes for a bailout were further crushed Wednesday when the European Commission said it did not think Arcandor qualified for state aid since the company’s difficulties began before July 2008 and were not caused by the credit crunch.

Germany’s Economy Minister Karl-Theodor zu Guttenberg said the government had not yet taken a final decision on Arcandor’s fate.

The Verdi services union on Sunday called on Merkel’s government to save the retail group and put pressure on its management to save jobs.

“Bankruptcy cannot be avoided without immediate help from the federal government,” union leader Margret Moenig-Raane said in a statement. “This aid has to come on Monday,” she added as tens of thousands of Arcandor employees planned to stage protests across the country.

The merger of Arcandor’s Karstadt and Metro’s Kaufhof chains, which together have 200 department stores in Germany, would end a rivalry dating back to the 19th century.

Metro’s Cordes told the newspaper Bild am Sonntag that a merger would probably lead to a closure of around 40 stores in their two chains. “Our rescue plan shows that our long-term view would be some 160 department stores in Germany,” he told the paper.

The merger proposal put forward by Metro was initially opposed by Arcandor.

Europe’s retail sector has been shaken by the global economic crisis amid a collapse in demand, with the demise of British high street retailer Woolworth’s and century-old German department store chain Hertie.

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OPINION: The new luxury Samaritaine store is an example of the ‘Disneyfication’ of Paris

Here is a parable of modern Paris - the parable of La Samaritaine - another piece of authentic Paris grittiness reinvented as a luxury attraction for foreign tourists, writes John Lichfield.

OPINION: The new luxury Samaritaine store is an example of the 'Disneyfication' of Paris
President Emmanuel Macron at the reopening of La Samaritaine. Photo: Christophe Archambault/AFP

Until 2005, La Samaritaine was the most popular and least fashionable department store in Paris, a Gallic version of Grace Brothers from “Are You Being Served”.

The store’s jumble of five linked buildings between the Rue de Rivoli and the river Seine was one of the few remaining islands of unselfconscious, authentic, non-tourist grittiness in central Paris.  You could find everything in La Samaritaine from underpants to diamond tiaras; from puppies to concrete-mixers; from ready-made curtains to piranha fish.

IN PICTURES See inside the revamped Samaritaine store

Entering La Samaritaine was like playing a game of three dimensional  snakes and ladders. Each floor had six or seven different levels, joined by slopes of worn linoleum or by short flights of steps. To get from curtains to electrical goods, supposedly on the same floor, you climbed a few stairs into showers and bathrooms, turned right and went down again.

After 16 years of dereliction and legal wrangles, La Samaritaine re-opened again this week – as a supermarket for luxury brands, a five-star hotel and a gourmet roof restaurant with an unrivalled view onto the river and the Île de Cité. It will have private viewing rooms for the super-rich. It will have cafés, where you can eat top of the range burgers and caviar-on-baguette.

The staff of the old Samaritaine were the least helpful in Paris and consequently the world. The new staff will wear chinos and sneakers – and a smile.

The slogan of the old store was “The whole of Paris comes to La Samaritaine.”. The new store is aimed at the richer citizens of Yokohama or Shanghai.

The destruction of the old Samaritaine was romantically, historically and socially a calamity. It was also, I suppose, inevitable.

The modern world, and modern retailing methods, passed La Samaritaine by on the other side. People no longer wanted to go to a shop in central Paris to buy a concrete mixer or lawn-mower or even a pet piranha fish. Samaritaine still had 12 models of lawn-mowers when it was closed overnight, allegedly for safety reason, in 2005.

The world’s biggest luxury goods conglomerate, Louis-Vuitton-Moet-Hennessy (LVMH) – has spent €700 million on re-building and re-imagining La Samaritaine, ripping out the sloping floors and worn lino but preserving its 1907 art nouveau metal stair-cases and galleries.

A spectacular, pale-yellow fresco of peacocks which surrounds the main atrium was all but lost in the old clutter. It has been wonderfully restored.

No doubt the new Samaritaine will be a great success – once the foreign tourists come in great numbers to France again. The new hotel, Le Cheval Blanc, will be the only “palais”, or five-star hotel, in Paris to have rooms and suites with views onto the river Seine.

All the same, the transformation is cruelly emblematic of what has happened to central Paris in the last two or three decades. There is a campaign going on at present against the alleged saccage (destruction) of the French capital by bicycle-lanes,  ugly street furniture and graffiti and poorly maintained gardens. I have sympathy with some, but not all, of the complaints.

What I regret far more – without knowing how it could have been prevented – is the fact that the inner arrondissements of Paris have lost so much of their quirkiness and eccentricity in recent decades.

The international travel boom (pre-Covid) has turned central Paris into a self-conscious, though still beautiful, “Parisland”, a tourist theme-park to match Disneyland 40 kilometres to the east. Even relatively well-off families are being pushed out by high rents and property prices.

The re-opening of La Samaritaine, delayed for a year by the Covid pandemic, is one of a flurry of restorations and recreations of land-mark buildings in central Paris this summer.

The Musée Carnavalet, which traces the history of the city, has been cleverly re-thought and re-designed. The Bourse du Commerce, a spectacular circular building near Les Halles which was moribund for decades, has been resurrected as an art museum and exhibition space by the billionaire art-collector and entrepreneur (Gucci and FNAC) François Pinault.

The Hotel de la Marine, one half of the imposing 18th century terrace which stands on the north side of the Place de la Concorde, has been beautifully restored as a series of restaurants and exhibition spaces.

All of these buildings are within 15 minutes walk of one another – and all are a short stroll from the Louvre and the Palais Royal and Notre Dame. They are, in their revived form, great and welcome adornments to the capital which will be appreciated by Parisians and visitors alike.

Except for La Samaritaine.

I cannot see the new version of this once great institution as anything but a theft – a loss, a diminution of what once made central Paris not just beautiful but idiosyncratic and unmistakably itself. 

And, in any case, where in earth does one now go in Paris if you suddenly need to buy a pneumatic drill?