82 year old business goes bust

Quelle

After 82 years of trading, the mail-order and catalogue firm Quelle is set to close in Germany with the loss of 7000 jobs, after it couldn't be saved.

The owner of the company, the retailer Arcandor, have been trying to sell the company, but according to the Arcandor administrator, Klaus HubertGoerg, efforts have collapsed.

"After intense negotiations with a number of investors, the insolvency administrator and the committee of creditors no longer see an alternative to liquidation," Arcandor administrator Klaus Hubert Görg told daily Süddeutsche Zeitung.

Services union Verdi says that although all workers at Quelle in Germany will lose their jobs, activities in central and eastern Europe will continue, the BBC have reported.

Arcandor

Arcandor, which also owns the Karstadt department store, filed for bankruptcy protection in June. Later, German authorities granted Quelle a 50 million-euro credit line to keep the business afloat.

Quelle tried to restructure its activities but its 2007/08 sales of nearly 2 billion euros came in far behind the market leader Otto.

The mail-order firm's fragile financial situation meant it was not able to find a partner willing to guarantee deals from suppliers.

One of the key reasons the company has been liquidated, is it has been impossible to reach an agreement for the factoring - banks pay the company upfront for accounts receivable from customers - of Quelle Deutschland from 1 January, the insolvency administrator said to Reuters.

Attention will now turn to the fate of Arcandor's loss-making department store chain Karstadt.

Hopes of a tie-up with German retail giant Metro were dampened last week when Metro announced that it did not need to add Karstadt to its line of Kaufhof stores.

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