BERLIN (AFP) – The future of Germany's Karstadt, Europe's third-largest department store chain, appeared to be secured Friday as a court approved its acquisition by a billionaire investor, safeguarding 25,000 jobs.
A court in Essen, western Germany, that has been overseeing months of wrangling over the rent to be paid for 120 Karstadt stores, agreed that investor Nicolas Berggruen could snap up the iconic chain, saving it from bankruptcy.
The court said in a statement it had "approved the insolvency plan for Karstadt."
"This is just a beginning. We all need to work together," Berggruen told reporters, adding: "I am working for you and for the future of Karstadt."
The High Street consortium of property developers, Karstadt's main landlord, agreed Thursday to lower its rental for the stores, removing a difficult stumbling block to a deal.
The path is now clear for the 49-year-old Berggruen to acquire the chain. Son of famous art collector Heinz Berggruen, he was born in Paris but has dual German and US citizenship and studied in Britain and the United States.
He owns a string of assets from Turkey to Cambodia and his international lifestyle, hopping from country to country by helicopter and staying in luxury hotels, prompted the Wall Street Journal to dub him the "homeless billionaire."
Karstadt, a venerable German chain founded in 1881 and which includes the famous Berlin department store KaDeWe, has faced bankruptcy since 2009 after years of erratic management.
It has also suffered from Germans' reluctance to spend, doubts over its future and the fact that people are deserting the department store model for shopping.
Found in almost every major German city, Karstadt is third in the list of European high street department store chains, behind Britain's Marks & Spencers and Spanish group El Corte Ingles.