British retailers are beating a retreat from the tough German market, which in the last month has seen a round of closures and cutbacks, with more to follow.
Domestic and foreign store groups have struggled to perform against the background of a stagnant economy. Many big German groups have focused growth on international expansion.
Last week, music retailer HMV said it will close its three German stores.
'It's a price-focused market,' said a HMV spokesman. 'We need to be competitive, and believe we are, but Germany is a hard market for retailers that have a focus on anything other than price.'
Laura Ashley and Kingfisher have also taken decisions to dispose of German operations.
Laura Ashley said it would close all its stores in Germany as part of the closure of 35 European outlets. Kingfisher, which continues to have a strategic alliance with German DIY retailer Hornbach, had already announced the closure of six Castorama DIY stores and the sale of its German electricals chains.
M+M Planet Retail analyst Bryan Roberts said: 'The German retail market is not a pretty place to be. There's little growth in the market and the German consumer seems reluctant to spend money.'
Body Shop and Carphone Warehouse and remain the only British retailers with a market presence, but Carphone chief executive Charles Dunstone has said he may sell the German business if the 106 shops fail to become profitable this year.
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