German retailer files for bankruptcy

Berlin German retailer Arcandor AG has filed for bankruptcy protection in an effort to salvage its department stores and its mail-order arm, a day after the government rejected its bid for state-backed emergency credit.

"Through filing for protection, our aim is to continue restructuring the company and its subsidiaries in an effort to ensure their survival," the company said in a statement.

Arcandor units including the Karstadt Warenhaus GmbH department stores and the Quelle GmbH mail-order company were involved in the filing.

The government on Monday rejected a bid from Arcandor for $610 million in state-backed credit.

Arcandor said that some 43,000 employees in Germany would be affected by the proceedings. They will receive their paychecks through August and then will be eligible to file for special state benefits.