KarstadtQuelle, the troubled German retail group, plans to sell further properties, including its headquarters building, on top of a ?4.5bn ($5.45bn) deal last week as part of sweeping restructuring measures that will all but end its days as a property owner.
A further ?600m worth of properties have been lined up for sale by the end of the year, including the KarstadtQuelle 1960s head office building in Essen, the company confirmed on Sunday. Details of a first package to be sold would be announced within the next two weeks.
The latest sell-offs would leave the group with ?hardly anything? in its property portfolio, the company said. KarstadtQuelle operates one of Germany?s best-known high-street department store chains, as well mail-order businesses.
The disposals are part of a turnround programme led by Thomas Middelhoff, chief executive, to rebuild profitability and slash debt at the group. A former head of the Bertelsmann media empire, Mr Middelhoff took over at the helm of KarstadtQuelle last May. The group had skirted with bankruptcy the previous year, hit by weak consumer spending in Germany, a cumbersome organisation and worldwide trend away from department stores.
As well as raising funds through disposals, KarstadtQuelle has laid off about 25,000 staff as part of its reorganisation.
Last week, the group announced a complex ?4.5bn refinancing deal backed by its core portfolio of property. Under that transaction, 174 properties, including department stores, offices and car parks, will be put in a joint venture owned 51 per cent by Goldman Sach?s Whitehall Fund and 49 per cent by Karstadt.
Proceeds from last week?s deal will be used largely to clear debt, but, together with the funds from the additional sales confirmed at the weekend, Mr Middelhoff will have a ?war chest? of more than ?2bn for updating its department stores and for possible acquisitions.
But KarstadtQuelle on Sunday gave no details about possible takeover candidates.
About 2,500 staff work at the Essen headquarters building, which the company plans to lease back from the purchasers.
Re-jigging headquarters has become a corporate trend in Germany.
Last month Thyssen-Krupp, the steel and engineering group, announced it was moving its headquarters from D?sseldorf to near the city centre in Essen, where it planned to build up a ?distinct ThyssenKrupp Quarter?.
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