BERLIN — The troubled German department store chain Karstadt is closing another five doors.
At an unscheduled meeting of the Karstadt advisory board, it was made known that the loss-making Karstadt stores in Bottrop, Dessau, Recklinghausen, Mönchengladbach-Rheyd and Neumünster will be shuttered in the first half of 2016. About 500 employees are to be affected.
Karstadt said that the sales and earnings developments at these stores have not only been negative for years, critically impacting the recovery of the whole group, but added that local drawbacks and structural problems meant these doors had no perspective for the future.
Karstadt currently operates 83 mid-market department stores. Last October, it announced plans to close its Hamburg Billstedt and Stuttgart Karstadt branches as well as the two “K-Towns” in Gottingen and Cologne and the so-called Bargain Centers in Frankfurt/Oder and Paderborn in the course of 2015.
Industry observers and company insiders have long talked of 20 to 25 potential store closures as part of the group’s restructuring process.
Karstadt CEO Stephan Fanderl said “We’re in the midst of a deep and comprehensive change and are well on our way… The restructuring has made heavy demands on us so far. But without very painful decisions, such as the closing of store branches, we cannot ensure the recovery of the entire group.”
The turnaround strategy, as announced last fall, is based on increasing profits, long term measures to reduce personnel and material expenses, as well as structural measures to improve the productivity of the Karstadt stores.
The group, which was acquired by the Austrian real estate company Signa in fall 2014, also includes 28 Karstadt sports stores as well as the three-door premium KaDeWe group. In recent weeks, talks of a possible sale of the prestigious KaDeWe department store in Berlin, as well as the other two premium stores Öberpollinger in Munich and Alsterhaus in Hamburg, have actively resurfaced.