International News - Karstadt reveals new store-type

German retailer Karstadt Warenhaus has opened a new store-type in the RheinRuhr Zentrum mall in Mulheim. If successful, the format will be rolled out to 20 more department stores.

The new design, at an existing Warenhaus store, has a significantly modified product mix. A higher proportion of space is given over to non-Karstadt concessions.

HSBC analyst Daniel Cane said the new look has been prompted by the poor performance of the original shop.

'The store ... has been loss-making primarily, according to KarstadtQuelle, because of its exposure to the depressed furniture market. It has been remodelled to reduce the amount of sales space managed directly by KarstadtQuelle,' he pointed out in a note.

KarstadtQuelle has invested EUR23 million (£14.5 million) in renovating the 40,000 sq m outlet. In the revamped store, 25 per cent of the total sales space has been given over to privately-managed shop-in-shop concessions, including Benetton, Golf-House and Gerry Weber.

The shop will also house a Starbucks cafe, the first of the US chain's concessions in a Karstadt store. Karstadt hopes to generate an annual rental income from concessionaires of EUR3 million (£1.8 million). The plan is to renovate three stores a year at a cost of up to EUR60 million (£37.9 million).

At that rate, around 40 per cent of Karstadt's department stores will be remodelled by 2007.