Karstadt on verge of implementing drastic measures

By

Bruno Joly

Published
Nov 10, 2014

Karstadt is preparing to eliminate the equivalent of 1,950 full-time jobs. In other words, taking into account part-time jobs, it intends to dismiss 3,000 employees. The German business newspaper Handelsblatt broke the story on Friday. The article refers to a letter from the board of directors. 

In addition to store closures, 6 of which have already been carried out, there are also plans to cut a quarter of jobs at its headquarters in Essen. According to the letter, its e-commerce department may be drastically reduced. Through its 83 traditional department stores, Karstadt employs approximately 17,000 people, meaning that 20% of jobs will be eliminated in the short term. Negotiations with management should begin on November 12th. 

In late October, Karstadt, which was recently taken over in its entirety by Austrian businessman René Benko, announced the appointment of CEO Stephan Fanderl, formerly of Real and Wal-Mart, who had joined its supervisory board in 2013. He warned of the urgency of returning the company to profitability through an extensive remediation plan including the structural reduction of its payroll.

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The closures on June 30, 2015 of stores located in Stuttgart and Hamburg have already been announced, as well as those of two stores pertaining to the new young concept K-Town, located in Cologne and Göttingen, as well as two discount stores. 

The plan only applies only to its 83 so-called traditional department stores and not its sports and Premium divisions. Overseen by André Maeder, its premium division was renamed The KaDeWe Group, referring to the historic West Berlin flagship.