Crunch time at Schlecker

Investment group Berggruen Holdings entered the sales process for the insolvent Schlecker group about two weeks ago, the German daily Stuttgarter Zeitung wrote Friday.

Citing a person close to US-based group, the newspaper said the "non-binding bid" was worth between 100 million euros ($125 million) and 150 million euros.

Berggruen Holdings is owned by German-American billionaire Nicolas Berggruen who has won a reputation in Germany as the so-called "Karstadt savior" after buying up insolvent German department store chain Karstadt two years ago.

Unlisted Schlecker filed for insolvency in January, after failing to secure funding to upgrade its stores. Since then, administrator Arndt Geiwitz has closed 2,000 of the chain's stores and has dismissed about 10,000 employees to make the remainder of Schlecker group fit for potential investors.

Decision delayed

A creditors' meeting on Friday did not decide over Schlecker's future and failed to pick a buyer for what's left of the chain. Insolvency administrator Geiwitz announced he would take another week to look for a suitable candidate. He had earlier said he was in "close talks" with three potential investors, but mentioned on Friday that one of them was out of the running.

It is estimated that Schlecker has run up debt close to 1 billion euros, and loses at least 100,000 euros per day in the face of stiff competition from domestic drugstore rivals Rossman and dm.

A sale to an investor is further complicated by about 4,000 lawsuits brought against Schlecker by former employees seeking compensation after they were made redundant.

uhe/sms (dpa, Reuters)