German IT retailer Arcandor has filed for bankruptcy after pleading for state help. It needed to renew credit lines worth €710m this week. Rival Metro had made an offer to buy the Karstadt subsidiaries, creating a large national chain, but this was rebuffed, and it is now up to the insolvency court to strike a deal.

The German government was cold on support, arguing that Arcandor would most likely not qualify for the economic stimulus fund from the state, which it provides for companies that are currently suffering from the economic downturn but were healthy before the credit crisis. The EC had already said that Arcandor's situatation pre-dated the crisis, essentially making it ineligible for aid from a special fund.

Its department-store operations Karstadt, as well as mail-order operations Primondo GmbH and Quelle GmbH also filed for insolvency. The company says it hopes to restructure under court protection from its creditors and keep its Karstadt stores in business. Arcandor said its operating companies will initially continue business in full, but that, overall, 43,000 jobs could be lost due to the insolvency.