Jul 12, 2013
Hundreds of Austria's Dayli drug stores face closure
Jul 12, 2013
VIENNA, Austria - A court-appointed administrator proposed closing 40 percent of Austrian drug store chain Dayli's shops to save money while the company hunts for an investor to save it, creditor agency KSV said.
Closing 355 stores and a warehouse would cost 1,261 jobs, posing a fresh test of whether a strong safety net that helps Austria to have the European Union's lowest jobless rate can handle a wave of corporate failures.
Maintaining its strong track record in tackling unemployment is a top priority for the government.
Alpine, the Austrian unit of Spanish construction group FCC , is being broken up and sold off in pieces after a bold foreign expansion went awry.
When Alpine went bust, the government went into overdrive, coming up with a 1.5 billion euro stimulus package to create more construction jobs.
Investor Rudolf Haberleitner launched Dayli a year ago from the Austrian remnants of Germany's failed Schlecker group, but had to throw in the towel and sold his stake to another investor just before the administrator took over.
Dayli, which has around 49 million euros ($63.9 million) more liabilities than assets, has proposed paying creditors 25 percent of their claims.
Across the border in Germany, retailer Praktiker also collapsed this week, prompting speculation that its outlets may be sold to rivals seeking market share in Europe's biggest economy.
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