In remodeling: the ailing department store chain Karstadt
For the approximately 17,000 Karstadt employees the nail-biting continues. Even in the first board meeting after the change of ownership of Nicolas Berggruen to the Austrian Signa group of real estate investor Rene Benko no concrete decisions have been taken yet regarding the closure of loss-making stores and the associated job losses. In the more than eight-hour meeting marathon that on the shareholder side newly appointed committee had discussed a restructuring plan for the still deeply inherent in this crisis department store, presented by the current sole director and Chief Financial Officer Miguel waste stream.
The successful restructuring was absolutely dependent on the implementation of comprehensive operational and structural measures, was shown at the meeting of the seriousness of the situation afterwards. The strategy pursued since 2011 was economically successful, the former Karstadt CEO Andrew Jennings is criticized indirectly. A further continuation of this course would be the losses increase. The management are now aiming at a reduction of personnel and material costs. The measures therefore include a profitability improvement of the branch portfolio up to the closure of branches. The reference that competitors with more than 20 percent less staff worked significantly more successful for like, lets not bode well for the workforce. Operationally, the department store group plans to hire the remaining houses with the ranges back stronger and the respective regional and local environment. Jennings is accused to have scared away patrons with too funky international brands.
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Immediately before the beginning of the meeting the employee had again knocked it to take into account the interests of employees. A location and job security was a main point, said the council chairman Hellmut Patzelt. That the ailing department store group holds at all sites, however, is long illusion. The Supervisory Board Chairman Stephan Fanderl has announced some weeks ago in this newspaper that more than 20 of the 83 branches are still unprofitable to the test and are also required in administration and logistics significant cuts. It is expected that the next Board meeting on 23 October bring more clarity about the extent of remediation steps. By then also fixed, as the new management team will look after the Swede Eva-Lotta Sjöstedt had thrown in the towel as Karstadt boss in early summer. The Signa Holding took over the loss-making business only a month ago by the German-American Berggruen for a symbolic euro.
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