Business News

Crisis mounts at European mail-order group Quelle

Jun 27, 2009, 12:45 GMT

Berlin - Quelle, a mail-order company which was once an icon of European capitalism, teetered Saturday on the brink of collapse as it was revealed that it had no cash of its own. Both Quelle, based in Fuerth, Bavaria, and its German parent Arcandor declared insolvency on June 9. Berlin has stonewalled on calls for a loan to keep the group going. Arcandor confirmed a report in the newspaper Sueddeutsche Zeitung that Quelle had remitted all its cash to Arcandor just hours before the insolvency filing. Since then, Quelle's operations have been entirely funded by suppliers allowing bills to go unpaid. Quelle is the keystone of Arcandor's web of mail-order and online vendors in 28 nations, employing 20,000 people. Until the 1989 fall of Communism, Quelle's 1,000-page mail-order catalogues were the bible of clothes and home appliances for East Europeans behind the Iron Curtain. Most German households own a few low-priced Quelle products. An Arcandor spokesman denied the handover was motivated by the insolvency. He said remittances of all cash to Arcandor from subsidiaries had been a daily and automated practice, allowing it to pool group resources. Horst Seehofer, the premier of the state of Bavaria, pressed Berlin on Saturday to rush 25 million euros (35 million dollars) in aid to Quelle, matching an offer of 21 million from his own state. Today, Quelle takes web orders, but younger Germans perceive Quelle's 70,000 wares as faintly out of date. Its has just published its winter catalogue using borrowed funds.

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Crisis mounts at European mail-order group Quelle

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