BERLIN — KarstadtQuelle has taken a giant step forward with its restructuring plan. On Wednesday, Europe's largest department store and mail-order group announced the sale of the 75 KarstadtKompact department stores, as well as the specialty store chains SinnLeffers and Runners Point. Financial details of the deals were not disclosed.
The 75 smaller Karstadt doors, which generated sales of 700 million euros, or $896 million, and have a workforce of 4,900, were sold to Dawnay, Day Principal Investments and Hilco UK Ltd. Dollar figures are at the average exchange rate.
The London-based Dawnay, Day is a financial services group with a primary focus on real estate. In the last 18 months the group has acquired more than 40 retail-related pieces of real estate in Germany with a total value of approximately 500 million euros, or $620 million. Hilco, with main offices in London and Chicago, is an investor focused on the retail sector. In the U.K., Hilco has been involved in the restructuring of the Allders Group and Littlewoods this year.
SinnLeffers, the Hagen-based specialty chain operating 51 multi-brand stores and 16 SinnLeffers shops, was sold to an investor group including DIH Deutsche Industrie Holding GmbH of Frankfurt, HMD Partners from the U.S. and London-based Curzon Global Partners/IXIS AEW Europe. Runners Point was sold to the venture capital company Hannover Finanz Group.
Regarding financial results for the second quarter, KarstadtQuelle's department and sports stores generated sales of 1.1 billion euros, or $1.4 billion, which is a 6.5 percent decline compared with the same period last year. However, according to the group, this was "better than planned." Earnings before interest, tax, depreciation and amortization narrowed to a loss of 38.1 million euros, or $48.1 million, from a loss of 77.1 million euros, or $100 million, in the prior year.
For the half year, department and sports stores sales fell 6.6 percent to 2.3 billion euros, or $2.9 billion, as EBITDA came in with a loss of 71.2 million euros, or $90.8 million, compared with a loss of 83.4 million euros, or $108 million, in the first six months of 2004.
With the triple divestment, KarstadtQuelle now plans to focus its over-the-counter business on its core of 89 department stores. In presenting the group's first half-year results, chief executive officer Thomas Middlehof said, "We have strengthened our core business and successfully sold our noncore activities. Four of five company divisions (over-the-counter retail, mail order, service, real estate, tourism) are back on course; only Universal Mail Order Germany needs to be restructured."
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"