Berlin - The owner of Germany's 90 struggling Karstadt department stores agreed Thursday to enter on-again, off-again talks with Metro AG, the German-based retailing multinational, on merging their store chains. A key German government minister earlier welcomed the proposal to absorb 60 of the emporia into Metro's Kaufhof chain.
Arcandor, the battered owner of the Karstadt chain, had earlier shied away from planned merger talks. Arcandor spokesman Gerd Koslowski said his company demanded talks "on the level of equals."
Speaking on Deutschlandfunk radio, Economics Minister Karl-Theodor zu Guttenberg said that if a merger was the solution, it would have to happen fast. Arcandor is scheduled to run out of bank credit on June 12.
A merger would leave Germany with only one national chain of department stores. Analysts say big downtown emporia are an obsolete business model and have broadly lost market share to big clothing chains and suburban malls.
Metro chief executive Eckhard Cordes is to meet this week with Germany's Chancellor Angela Merkel to set out the merger plan, the newspaper Bild reported.
The remaining 30 Karstadt shops, as well as 10 of Metro's Kaufhof department stores which would become redundant, would have to close, Bild said.
Arcandor is separately seeking buyers for its three luxury department stores in Germany's main centres: Alsterhaus in Hamburg, KaDeWe in Berlin and Oberpollinger in Munich.
A newspaper, the Hamburger Abendblatt, quoted sources saying it had been in talks about the three stores with La Rinascente of Italy, Debenhams of Britain and El Corte Ingles of Spain, while French companies Galeries Lafayette and Printemps had also shown interest.
Metro, the European Commission and centre-right political figures have all warned against offering German federal aid in a desperate bid to keep Arcandor solvent and save jobs at the company's various shops and its Quelle mail-order arm.
Labour groups and some ministers in the Merkel government are continuing to press for such aid, and have criticized Guttenberg.
