May 27, 2009
Arcandor's store landlords show flexibility
May 27, 2009
FRANKFURT, May 27 (Reuters) - Stricken German retail and tourism group Arcandor (AROG.DE) is in talks with the owners of its department store buildings to negotiate lower rent, two sources close to the talks told Reuters on Wednesday 27 May.
The talks were going very well, the sources said, and could result in a deferral or a temporary cut in rent Arcandor has to pay to the owners of its Karstadt stores, which are mainly owned by a consortium that is led by Goldman Sachs (GS.N) and Deutsche Bank's (DBKGn.DE) Rreef funds.
"No one from the real estate owners is interested in Arcandor going insolvent," one of the sources said.
Arcandor was not immediately available for comment.
Arcandor, which has long struggled to break even, has been dragged deeper into crisis by the global recession, prompting its chief executive to warn that it could go bust within weeks if it did not get more than $1 billion in state aid.
The talks are part of Arcandor Chief Executive Karl-Gerhard Eick's five-year turnaround plan, which will see Arcandor move downmarket and hive off loss-making businesses.
(Reporting by Philipp Halstrick)
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