Quelle has long been an institution in GermanyImage: AP
Quelle to close
October 20, 2009
After satisfying German demand for mail-order goods since 1927, Quelle is to close for good. Along with department-store chain Karstadt, it is a high-profile victim of parent company Arcandor's bankruptcy.
After 82 years of selling everything from furniture and laptops to perfume and sweaters, German mail-order retailer Quelle is set to close its doors for good.
A hoped-for sale of the company collapsed, according to the bankruptcy administrator of parent company Arcandor, Klaus Hubert Goerg.
"After intensive negotiations with a number of investors, the insolvency administrators see no alternative to the liquidation of Quelle Deutschland," Goerg said on Monday evening.
He added that one of the key reasons for the liquidation was the lack of an agreement on factoring - a type of pre-financing common in the mail order sector, in which banks pay the company upfront for accounts receivable from customers.
Announcement on job losses to come
It's not clear yet exactly how many jobs will be lost due to the shutdown. Quelle had already been planning on reducing its 10,500-strong workforce by roughly a third. Goerg said employees would be given more information on Tuesday. He added that 2,500 employees had already negotiated severance packages, and that another 600 have left voluntarily.
Arcandor filed for insolvency in June after its request for state aid was rejected. The insolvency administrator tried to find an investor for the whole of Arcandor's Primondo mail-order division, which, in addition to Quelle, also owns the specialty mail-order companies Hess Natur and Baby Walz, as well as the home shopping channel HSE 24.
Rescue attempts unsuccessful
Quelle, based in the Bavarian city of Fuerth, received 50 million euros ($75 million) in government-guaranteed loans in July to help it continue operations while administrtors searched for a new owner.
Goerg said that, in the end, none of the potential investors involved in talks made an offer for the entire unit.
While Quelle's German business is to be wound up, its international branches in Switzerland, Austria and eastern Europe, along with the specialty mail-order retailers and HSE 24, are to be sold off separately.
A creditor's meeting is scheduled for November 11 in Essen.