Insolvent German department store group Karstadt is set to be rescued by a consortium involving German billionaire investor Nicholas Berggruen and luxury fashion house BCBG Max Azria.

The future of Karstadt, which has 120 doors and about 25,000 employees, has been in question since parent company Arcandor filed for insolvency last June.

Nicholas Berggruen operates Berggruen Holdings, which has investments in real estate, renewable energy and creative arts. BCBG Max Azria owns the BCBG, Max Azria and Hérve Léger luxury fashion labels and has ambitious plans for UK stores.

The partners were chosen by the Karstadt creditors’ committee. It favoured them over a high street consortium, which owns 86 of the Karstadt store properties and involves investment bank Goldman Sachs, Deutsche Bank, Pirelli Real Estate, Generali Insurance and Italian department store mogul Maurizio Borletti.

The creditors also rejected a bid from German-Scandinavian private equity firm Triton.

Further details of the deal were not disclosed but Berggruen has previously said that he wanted to keep the whole Karstadt chain in operation.