KarstadtQuelle off to slow 2004 start

23rd March 2004, Comments 0 comments

23 March 2004 , DUSSELDORF - Germany's fifth-largest retailer KarstadtQuelle, coming off a year when net earnings fell by one-third, said Tuesday it is off to a slow start in 2004 and is now launching a programme to restructure and boost earnings again. At a press conference discussing 2003 figures, KarstadtQuelle chairman Wolfgang Urban said the company sees a four to five per cent drop in revenues in the first quarter of 2004. Sales in the first few weeks of this year had not been satisfactory, he added.

23 March 2004

DUSSELDORF - Germany's fifth-largest retailer KarstadtQuelle, coming off a year when net earnings fell by one-third, said Tuesday it is off to a slow start in 2004 and is now launching a programme to restructure and boost earnings again.

At a press conference discussing 2003 figures, KarstadtQuelle chairman Wolfgang Urban said the company sees a four to five per cent drop in revenues in the first quarter of 2004.

Sales in the first few weeks of this year had not been satisfactory, he added.

Nor would the company at the moment be able to make any sales and earnings projections for 2004, Urban said, citing the uncertain economy in Germany and the risks of terrorism in Europe.

Under a restructuring programme called "Challenge", KarstadtQuelle will be seeking new partners and other ranges of products, at the same time cutting overhead costs and reducing those areas now losing money, the chief executive said.

"The earnings potential is expected to be some EUR 300 million by the business year 2007," he said.

The KarstadtQuelle group's department stores will be concentrating again on core business areas, while measures would be implemented to operate salesroom floors more profitably.

Among others, KarstadtQuelle will seek new partners to operate on the department stores' premises in a bid to share opportunities but also risks, Urban said.

A first step in this new strategy came last week when KarstadtQuelle entered a joint venture with the food store chain Rewe. Starting in 2005, the two companies will jointly operate 72 food areas in Karstadt department stores.

Urban's remarks came after KarstadtQuelle last week reported that its 2003 net profits dropped to EUR 108 million, or 33 percent from EUR 162 million in 2002, while group sales fell 3.4 percent to EUR 15.3 billion.

 

DPA

Subject: German news

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