Giant German retailer holds crisis talks

27th September 2004, Comments 0 comments

27 September 2004 , ESSEN - The board of KarstadtQuelle, Europe's largest department store and mail order group, went into a crisis session Monday to draft plans for a company overhaul which media reports said could mean up to 8,500 jobs being slashed. With the company battling red ink and high costs, KarstadtQuelle's management may be mulling the closure of more than one-third of its 181 department stores around the country. The plans for the overhaul were drafted by chief executive Christoph Achenbach,

27 September 2004  

ESSEN - The board of KarstadtQuelle, Europe's largest department store and mail order group, went into a crisis session Monday to draft plans for a company overhaul which media reports said could mean up to 8,500 jobs being slashed.

With the company battling red ink and high costs, KarstadtQuelle's management may be mulling the closure of more than one-third of its 181 department stores around the country.

The plans for the overhaul were drafted by chief executive Christoph Achenbach, with supervisory board chairman Thomas Middelhoff saying in the latest issue of the weekly Der Spiegel that the overhaul was a "matter of survival".

According to the Frankfurter Allgemeine Zeitung newspaper, KarstadtQuelle may be chopping up to 8,500 jobs, from a current payroll of around 100,000. The cuts would be twice as many as previously announced.

KarstadtQuelle posted adjusted pre-interest plosses of 388.5 million euros in the first half of 2004, some 34 percent above the EUR 289.30 million red ink in the same period last year.

The company, hurt by sagging German consumer demand in a sluggish economy burdened by stubbornly high unemployment, warned in August that it may post full-year losses of some 200 million euros in absorbing the costs of its overhaul.

On the Frankfurt Stock Exchange's MDAX, KarstadtQuelle shares had lost more than 8 per cent of their value ahead of the supervisory board meeting as investors reacted to the media reports about the company's overhaul plans.

DPA

Subject: German news
 

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