Arcandor, the German retailer which owns the German department store chain “Karstadt” as well as a major stake in the UK travel group “Thomas Cook” told the German government on Tuesday that it would file for insolvency if it did not obtain assurance of state aid.

The German Economic Minister, Theodor zu Guttenberg, told media on Monday that the German government would be careful in handing out state aid if not even the company’s owners were convinced of the company’s chances at recovery. However, the government had given Arcandor a last chance to improve its request for a short-term loan from the state by getting shareholders, creditors and landlords to put up more of their own money to help rescue the company.

Arcandor met with its main investors, banks, and the owners of its retail properties on Tuesday, but could not reach a resolution which would have provided an alternative to insolvency.

The decision opens the way for Arcandor’s German competitors Metro Group, Otto, and Rewe to carve up important parts of the business, although job losses among Arcandor’s German workforce of more than 50,000 people are still likely to be significant.