Woolworth Germany Files for Insolvency

FRANKFURT (Reuters) – German department store chain DWW Woolworth GmbH & Co, owned by British investor Argyll Partners, filed for insolvency on Tuesday, a court said.

The Frankfurt district court appointed Ottmar Hermann as interim administrator, a court spokesman said.

The news comes just months after Britain’s Woolworths, the 100-year-old sweets-to-DVD retailer, went into administration in November.

U.S. retailer F.W. Woolworth founded its German subsidiary in 1926 and opened its first store in the northern German city of Bremen in 1927. Woolworth today operates 323 stores in Germany, employing about 11,000 staff.

It generated about 900 million euros ($1.2 billion) in sales in its fiscal year to the end of October 2008.

The subsidiary separated from its parent in 1998 through a management buyout and since 2007 has been owned by Argyll Partners.

Retailers around the world are suffering as the global economic downturn spoils consumer spending amid rising unemployment. Refinancing has also become increasingly difficult as a result of the financial crisis.

Department stores in particular are struggling as customers prefer to shop at discounters or specialist shops.

Arcandor (AROG.DE), whose German department store chain Kartstadt posted an operating loss of 272 million euros in 2007/08, is now looking into applying for state aid. (Reporting by Alexander Huebner and Nikola Rotscheroth; Writing by Eva Kuehnen; Editing by Michael Shields)