Karstadt

"Nevertheless, it falls far too short to see Haselsteiner only as a construction entrepreneur. In fact, he is one of the most active, enterprising, and versatile entrepreneurs in Austria. Directly or indirectly, he is involved in more than 900 (!) companies and corporations. For instance, in 2008, together with partners, he took over the troubled and scandal-ridden Constantia Privatbank, restructured it, and at times held 75 percent of the shares in the successor credit institution, Semper Constantia Privatbank. Again, with other business friends, he made the state-run ÖBB railway company face competition as a co-founder of the private railway company WESTbahn. He participated in major hotel projects, possesses shares in two ski resorts, a thermal spa, real estate companies, and indirectly even in the German department store chain Karstadt and the legendary KaDeWe (Kaufhaus des Westens) in Berlin."

"With Karstadt, Nicolas Berggruen took no risk. If the department store chain continues to write red figures, Plan B comes into play – a solution that, for example, the mail-order company Otto has already executed. When the French subsidiary, the mail-order department 3Suisses, became a permanent concern, they began to explore the market as to which parts of it could still be sold most profitably. The lingering suspicion that Nicolas Berggruen would act similarly and quietly scout out the terrain with banks, investors, and even his rivals was finally confirmed like a bolt out of the blue."

"Hoover Treated Wood Products, USA Wood is the number one building material in the USA. The company, founded in 1955 and based in Georgia, is one of the largest wood suppliers in the world. When it ran into trouble, Berggruen set it straight again. The company's uniqueness: It is led by the same professional who also chairs the supervisory board of Karstadt: Jared Bluestein from New York."

""Karstadt is part of my international corporate group, which is controlled by a so-called holding company. The holding receives an annual amount for its activities, e.g. administration. I personally do not make a cent from it." NICOLAS BERGGRUEN"

"By now, at least half of all Germans know when his name is mentioned that he is "Mister Karstadt". Since September 2010, Nicolas Berggruen has owned this German retail icon, which was founded in 1881 and which he took over for a symbolic euro to prevent its downfall for the time being."

"The secretive rivalry between the two also continues in the race during the Karstadt insolvency. Rubenstein was smarter and faster than Berggruen and snatched up the lucrative parent company Primondo, under which Arcandor AG had bundled its mail-order business in 2007: Quelle, Hess, Natur, Bogner, Baby-Walz, Teleshopping, and HSE 24. About 20,000 employees worked for Primondo in 28 countries, nearly as many as for the Karstadt department stores as a whole, and the sales volume was also similar at 3.4 billion euros a year."

"Almost 50 banks and investors are involved in the company rescue. During the dismantling of the Schieder Group, Nicolas Berggruen acquires the foreign trade division. A branch that is already completely established in Liechtenstein and introduced along with the administration into the tax-advantageous climate. Berggruen can build on these stones. Today, they are the foundation of an entire labyrinth of companies. Additionally, through the Schieder participation, Berggruen establishes contact with the restructuring expert Thomas Fox, who will play a significant role in the Karstadt insolvency."

""I am very pleased with Karstadt. Just yesterday, I read the coverage of our new openings again in peace, for example, the loft floor in KaDeWe or the modernized department stores. Moreover, our new concept KTown has just been awarded 'Department Store of the Year.' I was very happy about that." NICOLAS BERGGRUEN"

"Nicolas Berggruen settles liabilities amounting to 65 million euros with a loan that he secures himself and for which he charges Karstadt interest."

"The key points of the strategy: – the discovery of the sentimental and familial connection to Berlin – Nicolas Berggruen's childhood memories of Karstadt as an iconic German department store – flattering words for Berlin, Germany, the Stülerbau, and the KaDeWe – integration of charitable future plans through Berggruen's patronage in the cultural field – presenting oneself with a modest and shy attitude at public appearances. In the sense of "I am not important, Karstadt is important" - "Picasso and the Berggruen Museum" are important – self-portrayal as a man of discernment, disinterested in material possessions – myth of the self-made man with emphasis on personal achievement: Nicolas Berggruen did not become a billionaire through his father's inherited capital, but made his money himself. With his know-how, he built up the holdings."

""If Berggruen sees Karstadt as a long-term investment, as he claims, there is no operational reason for the leasehold easements," quotes the Frankfurter Allgemeine Zeitung (from 06 July 2010). What Schleyer now suspects has already been expressed by Maurizio Borletti to Bild (from 22 July 2010). The Italian department store owner is involved in the negotiations about Karstadt's rents as a Highstreet investor. "I believe Mr. Berggruen wants to break up Karstadt and sell it off in pieces." Berggruen wants to pocket the proceeds of up to 300 million euros for himself, which is why he also refuses to guarantee to keep the group together."

"THE JARED BLUESTEIN FILE A special place in German economic history is already secured for him: the first professional poker player to sit on the supervisory board of a traditional German company. In the hierarchy of Berggruen Holdings, Jared Bluestein occupies a key position. He is listed as the chief operation officer on the homepage, responsible for "buyout activities, investment sourcing, portfolio oversight and firm administration". Literally, buy-out means "buy-out", which hits the nail on the head: a company is financially leveraged by another by first acquiring individual business parts, thereby gaining control over the entire company later. Bluestein's competencies also include investment acquisition, controlling, administration – in the case of Karstadt, this also includes the position of supervisory board chairman."

"Friday, May 21, 2010 It is announced through the press that Berggruen Holdings wants to take over all of Karstadt's business activities. A spokesperson of Berggruen Holdings justifies the interest in the cult brand Karstadt as it was defined by adviser Weber-Thedy: "For Nicolas Berggruen, Karstadt is part of his childhood. Berggruen has a strong connection to Berlin, which is certainly also reflected in this commitment." The cult surrounding Heinz Berggruen in Berlin persists; his myth is transferring to his son. The press does not question the information coming from the Berggruen household. Nobody notices that there is no emotional connection between Nicolas Berggruen and Karstadt. Behind his statements is the PR strategy of Weber-Thedy. In reality, Berggruen spent his childhood in Paris, his apprenticeship in London, and his college years in New York. If he is now discovering his bond with Berlin, it is solely because since 2005 he has been collecting Berlin real estate at bargain prices like Lego blocks."

"⁠November 2009The service trade union Verdi agrees to a sacrifice of 50 million euros per year by the workforce to save the troubled department store chain. At the same time, creditors give the green light for the further partial sale of Karstadt to an investor. Tough cuts are imminent.⁠"

"the Italian department store king Maurizio Borletti. Surprisingly, on August 1, he makes an offer for the takeover of Karstadt. It's no secret who is supporting him: Deutsche Bank, also a stakeholder in Highstreet Holding. Though Borletti's empire with the Italian department store chain Rinasscente and the French budget department store brand Printemps has also been shaken, he can rely on the US investor Gordon Brothers for his bid for Karstadt."

"How Berggruen intends to improve world politics with this decommissioned leadership troop is hard to imagine. But he is determined to realize his youthful dream. That's why he has no time and no great interest in visiting the Karstadt branches and making a personal assessment of the difficult situation of the famous department store. For him, it's all about politics now. He buys Karstadt like a pig in a poke - in the flickering belief that there is a treasure hidden in that poke. "A German treasure," as Berggruen likes to refer to Karstadt in the press."

"In his investments, Nicolas Berggruen has so far not invested his own money, but first set up funds with his partners; only after that did he go on a shopping spree. Johannes Neckermann, son of mail-order tycoon Josef Neckermann, experienced the takeover of the Neckermann department stores by Karstadt firsthand during the Frankfurt "Nights of the Long Knives" in 1976."

"When Berggruen invites to the annual meeting at his father's museum a year later, Margret Mönig-Raane is also among the guests. The museum serves as Berggruen's stage. Here, he can showcase his prestige. Like a king, he is celebrated, the claqueurs applaud. At the same time, preparations for the Karstadt takeover are underway in the background."

""The goal of the German-American billionaire is to preserve, revive, and rejuvenate the ‘cult brand’ Karstadt." The department store chain should focus on the segments fashion ("Fashion"), home accessories ("Living"), sports, and personal accessories as well as jewelry and cosmetics ("Personality") in the future. The restructuring experts have identified clear weaknesses here compared to relevant competitors such as Douglas, Peek & Cloppenburg, C&A, H&M, or Zara."

""I am following Mr. Berggruen's investment in Karstadt with great interest. It's a US blueprint. I also had to learn that the Americans always prefer to invest other people's money in ongoing businesses. Their own money is more likely to go into real estate and permanent valuables. Ongoing businesses always involve a great risk, as one can now clearly see with Karstadt. In such cases, the Americans avoid personally committing themselves."

"As the first income from the Karstadt deal, Berggruen can record the usage fee for the naming rights of Karstadt, which he has secured for five million euros. There is a rumor that the fee should be 12 million euros annually. Nicolas Berggruen denies this, but does not mention a specific figure. His Karstadt Holding in the Dutch Beusichem will be set up ahead of the previous Karstadt headquarters in Essen and will charge an administrative fee. The amount of the sum is a trade secret. Karstadt will no longer be a public company, so the internal balance sheets no longer need to be made publicly accessible."

"Thursday, November 18, 2010 Alain Caparros, who has been a new supervisory board member of Karstadt for one month, gives top priority to the search for a new CEO. Currently, Thomas Fox – a temporary solution and Berggruen's confidant – is still managing the business. He is certainly an experienced restructuring expert, but not a specialist for department stores, as he is said to have expressed himself."

"The Carlyle Group from New York took over the Karstadt property in Esslingen on February 6, 2013. The price for the 11,000 square meter space was 70 million euros, with the rental agreement with Karstadt still having a remaining term of 13 years. A look behind the scenes reveals how such takeovers are financed. The Carlyle Group also does not invest its own money. For the purchase, a fund (CEREP III) was launched, the financing is provided by the Kreissparkasse Esslingen. Colliers International was commissioned as the broker, with the transaction being carried out as a joint venture with the Frankfurt project development company Baumanagement Gesellschaft mbH (PBG) and 3W Immobilien."

"This information is in stark contrast to the plan Berggruen announced in Germany. Here he expressly talks about the investment of 400 million euros in the renewal of the Karstadt stores "coming from the cash flow". The approximately 73 million euros mentioned in the New York Times are not, in fact, a capital investment into the Karstadt company, but rather a loan of 65 million euros, which Berggruen had allowed himself to be repaid shortly after the acquisition. Did Berggruen himself manipulate the facts, fib, or boast? Against such accusations, he can easily defend himself with the indication that he was misunderstood by the New York Times. The journalists are to blame."

"The KaDeWe in Berlin is getting a new owner just before Christmas. The Austrian real estate investor René Benko pays a total of more than 1.1 billion euros for the luxury department store and 16 other department stores rented to Karstadt. According to media reports, Benko's company Signa is paying 500 million euros for the KaDeWe alone. The seller is the landlord consortium Highstreet Holding in London. Nicolas Berggruen, the owner of Karstadt, will continue to operate the KaDeWe, but he now has to negotiate a new rent with the new owner."

"However, the decisive argument is monetary: Berggruen has been able to win over Blackstone as a partner. The Metro Group is seeking roughly two billion euros for its Kaufhof chain – an entirely different price range compared to Karstadt."

"The think tank enjoys Berggruen's full attention. Compared to it, Karstadt plays only a subordinate role. The costs of the Paris "Berggruen Conference" are estimated to be about 1.2 million euros. For Berggruen, obviously a trifle. His compulsive urge to interfere in politics is commented on the internet with critical to mocking remarks. The tenor: Berggruen surrounds himself with know-it-alls and incorrigibles. Some have lied to their voters, others have simply failed and were voted out."

"Monday, June 24, 2013 "Karstadt owner Berggruen earns handsomely with Berlin real estate," reports Wall Street Online. Since 2005, his holding company has invested around 300 million euros in the acquisition and renovation of about 100 residential and commercial buildings in Berlin and Potsdam. Their value is now estimated to be around 450 million euros. The most recently published balance sheets of twelve Berggruen real estate companies show a total investment volume of 417.6 million euros at the end of 2011. In mid-May, his holding company purchased another 80,000-square-meter property in Berlin-Schöneberg. The former headquarters of Knorr-Bremse, a manufacturer of brake systems for rail and commercial vehicles, which has been part of Berggruen's real estate holdings since August 2012, is now home to the online retailer Zalando – a competitor to Karstadt."

"At the book presentation in Berlin, such questions are not asked, nor is Karstadt a topic. Most seem to know that Berggruen is not at home in the world of corporate management, the restructuring of companies. Or as Berggruen himself once said to the American news channel Bloomberg: "I realized pretty early on that I would probably be a terrible manager.""

"Karstadt is a lady of advancing years. The advisors to Nicolas Berggruen are aware of this. That's why they recommend a PR stunt. Subsequently, Nicolas Berggruen announces that they have been able to secure fashion designer Max Azria for Karstadt."

"In the year 2013, René Benko and Roland Berger take a seat at one of the white-laid tables. They dine on upscale bourgeois food at Borchardt, a whole plate-filling Wiener Schnitzel being one of the most popular dishes. Occasionally, one of the other guests comes to the table around lunchtime and greets Berger, who then introduces the young man and successful entrepreneur by his side. Just then, Benko's Signa had entered the department store chain Karstadt and would soon take over all shares from the failed US entrepreneur Nicolas Berggruen. Thus, Benko suddenly becomes a highly relevant real estate investor in German city centers."

"Together with investment banker Florian Lahnstein and the former Bertelsmann and interim Karstadt boss Thomas Middelhoff, Berger brought the first SPAC to Europe; the name stands for "Special Purpose Acquisition Company"."

"In 2011, Benko, an avid skier, bought a dilapidated hotel in the winter sports resort of Oberlech and transformed the area into "Chalet N," affectionately named after the initial of his wife's name. Theoretically, the house can be rented for 350,000 euros a week, but in practice, Benko mainly uses it himself during the winter. His family spends several weeks there every year, and he often invites business partners or employees for strategy meetings. Thus, they gather in a larger group before the merger of Karstadt and Kaufhof to consider the next steps."

"And Benko served the fantasy of ever higher, further, better with new acquisitions. Thus, he transformed the real estate company Signa, which only invested in prime locations in core Europe, into a conglomerate of real estate, trade and media, and also a bit of digital business. From a business in which he was more knowledgeable than anyone else, it becomes an increasingly complex conglomerate. In 2013, Benko entered the German department store business with the purchase of Karstadt, more of an opportunity than a long-planned venture. Five years later, he also secured the acquisition of Kaufhof after a long attempt. With the idea of merging into the German Department Store AG with high synergies, he attracts fresh investors. Among them is Roland Berger, who invests in the still-young retail division, but also in the two main Signa companies, Prime and Development."

"Berninghaus met Benko through detours. The German-American investor Nicolas Berggruen, whom Berninghaus calls a "mega close friend," sought contact with Benko in 2012. Two years earlier, Berggruen had presented himself as a good investor for Karstadt's department store business. A billionaire who invested his money in sustainable projects like renewable energies and made everyone believe that he was not only looking at the return but also had society in mind. Berninghaus is said to have advised Berggruen against buying Karstadt at the time. The lifestyle, without a fixed residence, with changing hotels as workspaces, the many parties – this way, Berggruen could not operate a business in Germany. A failure was predicted: After acquiring Karstadt, Berggruen's involvement with the department store ceases. He leaves the management to others, Karstadt continues to incur losses. This is followed by layoffs, investments are at zero, and the smart billionaire increasingly withdraws from the public eye. While Berggruen begins to regret purchasing Karstadt, Berninghaus meets a Signa manager at an evening event in Nuremberg. Berninghaus, then still the trade director of the Swiss chain Migros, starts chatting with the Benko man. In the end, there is a promise to introduce Berninghaus to Benko."

"Benko generated 140 million euros, only then was a protective shield procedure possible, in which, unlike a complete bankruptcy, the owner still has control. The protective shield procedure offers Benko - besides the risk of a poor image - also opportunities. Lease contracts can be terminated more quickly, employees can be laid off more easily, and the already planned restructuring can be done more radically and in fast-forward. Signa's man for the protective shield procedure is a familiar face to Benko: Arndt Geiwitz, the tax consultant and auditor known to the broader public from the Schlecker insolvency. Benko first hired Geiwitz in 2013 during the purchase of Karstadt, where he had him review the finances. He also assisted in the takeover of the Otto subsidiary SportScheck. Now he is supposed to reorganize the department store business at Galeria. In the end, around 40 branches will close. No one among the top executives had experience with a protective shield procedure, says a trade manager. Geiwitz, on the other hand, would have known how to quickly set up a protective shield procedure, how to control the creditors' committee, which people to bring in; he did all that very cleverly."

"In 2013, Benko entered the German department store business with the purchase of Karstadt, more of an opportunity than a long-planned venture. Five years later, he also secured the acquisition of Kaufhof after a long attempt."