Signa Holdings acquires Karstadt for one euro

Karstadt, the loss-making German department store group, has finally found a new owner after months of speculation

surrounding the group's future.

As of next week, Signa Retail, the daughter company of the real estate investment vehicle owned by Austrian investor Rene Benko and Israeli businessman Beny Steinmetz, Signa Holdings, will take over the entire department store group. Previous news reports from German newspaper Bild, had indicated that Nicolas Berggruen, the billionaire owner of Karstadt, had considered selling a 70 percent stake of the group to Signa.

Now Signa has announced that it has agreed to take over the whole chain, which currently consists of 83 stores across Germany that currently employ 17,000 individuals. The firm will also acquire the remainder of Karstadt Premium department stores and Karstadt Sports, after taking a 75.1 percent stake in the group last September for 300 million euros.

“Karstadt needs clarity about the future ownership structure,” said Wolfram Keil, chief executive officer of Signa Retail in a statement. “Therefore Signa will also take over operational responsibility.” Karstadt has already injected 200 millions euros from Signa's investment in the modernisation of its stores over the past few months and has agreed to let Signa Holdings take over the remaining 24.9 percent for the symbolic sum of one euro.

The takeover has been described as the next logical step between the two companies. “We are already engaged extensively at Karstadt - thus the complete takeover of the Karstadt department store was given the current situation, the logical consequence.” He added that the group has turned its focus to developing a “viable recovery strategy” for the department store group and implementing it as soon as possible.

“What Karstadt needs from all involved is complete concentration on the common cause, and to get out of the media and the gruelling public debate,” concluded Keil. “As a result, in the near future, we will not be giving status updates . . . but will instead concentrate exclusively on the key topics of turning Karstadt around and making it fit for the future.”