June 9, 2009

Arcandor seeks bankruptcy protection

The German holding company Arcandor, unable to get nearly $1 billion in government loan guarantees, sought shelter in bankruptcy court Tuesday.

Arcandor had wanted the loan guarantees as it sought to refinance its debt load, the BBC reported. German Chancellor Angela Merkel said no state aid would be available until the company assembled a workable plan that included more capital from its owners and banks, the British network said.

Arcandor employs about 70,000 people in a variety of businesses, including mail-order and Internet shopping, department stores and travel services.

The company said the bankruptcy filing covered its Karstadt retailing operations and its mail-order businesses, but that its Thomas Cook travel services unit would remain unaffected.

Officials at Thomas Cook, which has stayed profitable, acted to calm its customers.

We've been around for 167 years and will be for many more, a spokesperson for Thomas Cook told the BBC. This will have no impact on holidays -- customers should not be concerned whatsoever.