Germany's Woolies sells Thomas Cook
German retailer Arcandor is set to sell off its only profitable business, Thomas Cook after filing for insolvency.
"Germany has had its Woolworths moment," said Lex in the FT. Arcandor, a 128-year-old German retailer that also owns 53% of British travel operator Thomas Cook, filed for insolvency this week after the German government refused it state aid. It marks Germany's biggest non-bank collapse in this crisis.
It's good news that the government "didn't succumb to the impulse to save jobs" in this case, said FAZ.net. State money would simply have delayed the day of reckoning. Arcandor's problem was that its department stores were in structural decline. The market has polarised between specialist, high-end retailers and discounters; "there wasn't much demand anymore" for mid-price department stores, said Josef Auer of Deutsche Bank.
What next?
Arcandor's only profitable business, Thomas Cook, is set to be sold off. The "tantalising prospect" for shareholders is that someone will buy the stake as a prelude to a full bid, said Ian King in The Times. Germany's tour operator Rewe has said it is interested.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But despite the industrial logic of two tour groups combining, Rewe will struggle to come up with the £2bn-plus its UK rival would fetch. A share placing looks more likely, said Lex. As Thomas Cook has "healthy prospects in a European market it now dominates with Tui Travel", it shouldn't have any trouble attracting interest.
TCG: 217p; 12m change 0%
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Bitcoin price one of the most-asked questions on Alexa - here's how to buy the cryptocurrency
According to figures from Amazon, which cover September 2023 to November 2024, pop star Taylor Swift and Bitcoin were named among the most popular Alexa queries of 2024
By Chris Newlands Published
-
Investing for children this Christmas – five ideas
It might not come with a shiny ribbon, but an investment fund could be the gift that keeps on giving. We share five ideas if you are investing for children this Christmas.
By Katie Williams Published