Arcandor

On the one hand, the Arcandor crisis was a victim crisis because of the Lehman Brothers disaster. Arcandor got insolvent through the financial crisis. On the other hand, it was an intentional cluster too. Maybe Arcandor could have been saved!

Arcandor AG was a trading and tourism group with headquarters in Essen with the three core business areas of retail (Karstadt), mail order (Primondo), and tourism (Thomas Cook).
Until 2007 Arcandor was called KarstadtQuelle. The vicious circle of Arcandor started when the credit insurer Euler Hermes limited the protection for deliveries of goods.

When we analyze the crisis regarding to the initial crisis responsibility and crisis history, the stakeholder thought that Arcandor was not responsible for the bankruptcy in the first line. They were a lot of stakeholders who tried to save Arcandor. In November 2008, the private bank Sal. Oppenheim granted Arcandor AG a loan of 20 million euros until April 2009, although one month before Arcandor was able to reach an agreement with two other banks to refinance its loans, because of debts worth 1,5 billion euros. At that point, they had to know that the company had vast problems.

In 2008, Arcandor had debts worth 2.5 billion euros. So Arcandor was responsible too that they got bankrupt no one can deny that.

In September 2008 the publicity knew that Arcandor needed loans because they were in debt, the question was what they are going to do and what was the problem. Arcandor made the statement: ”Contrary to our original planning, we have not yet made a decision, the reason being the turmoil in the banking sector “.

On the one hand, to this time, it is true that the banking sector had to face a crisis, but on the other hand, the turmoil occurred in some ways, because the banks had no idea how to save a company which is so in debt, while the whole financial system is collapsing.

Arcandor was doing a kind of victimage, which belongs to the bolstering crisis response strategies. They mentioned that the global financial crisis was responsible for their bankruptcy and that is the reason why everything went wrong.

The truth is, maybe Arcandor could have been saved. Not only the global financial crisis is responsible for the Arcandor crisis. All the debts no one talked about were responsible too! Maybe without all the debts, they could have found a company that saves them.

If I were Arcandor I would use the apology theory. In this situation, I am sure that would have been worked. They only had to be honest on the first day not month after that… They should have said something like: “We need help because we have too many debts and when we wait too long, we will go down because no one can help us through the global financial crisis.”