Karstadt, the big German department store chain, is in deep trouble, but may have new prospects. Its parent company, Arcandor, which also controls Quelle, the huge mail-order company, does not see any alternative to governmental guarantees to keep the retailer alive. Stefan Herzberg, the boss of Karstadt Warenhaus, told the weekly Bild am Sonntag that even a merger with Galeria Kaufhof – whose parent, Metro, is now considering a possible takeover of the Karstadt chain – would not help a lot in the short term because Arcandor has to pay back loans worth some €600 million by mid-June. Altogether Arcandor is asking the German government to grant a loan of €200 million and credit guarantees of €650 million to secure the near future. Arcandor’s arch-rival Metro sensed the tense situation at its competitor and suggested a merger between its own subsidiary, Galeria Kaufhof, and Karstadt to form a so-called Deutsche Warenhaus AG (“German department store, Inc.”). The management of Arcandor has gotten the impression that Metro is ready for such a move under the condition that Arcandor or Karstadt would file for bankruptcy. This plan is opposed by Arcandor’s managers. (Read more in the upcoming issue of Sporting Goods Intelligence Europe.)