German retailer KarstadtQuelle is embarking on swingeing operational changes at its department store business, creating speculation that up to 3,000 redundancies may follow.
The changes are the second wave for the group, which also operates a mail order business and a sporting goods chain.
KarstadtQuelle chairman Wolfgang Urban blamed falling group sales on aggressive price competition, and unease about governmental reform depressing consumer confidence in its native market.
'We shall be concentrating on our core competencies in the department store sector,' said Urban. He added that the changes would affect about half of all department store space, and would include more concession partnerships, a reduction of loss making categories, the introduction of more fashionable ranges and the 'reduction of fixed costs'.
A company spokesman refused to comment on speculation over jobs cuts.
However, the retailer said in a statement that there was 'considerable potential' to reduce fixed costs in 'logistics and administrative tasks'.
As part of the strategy to increase the number of partners and reduce risk in loss-making sectors, the retailer has already announced an equal joint venture with supermarket giant Rewe.
KarstadtQuelle plans to 'optimise' its Living home offer, by reviewing loss-making lines and introducing a range, called YornCasa, to 50 stores this summer.
The retailer reported a fall in group sales of 3.4 per cent to EUR15.3 billion (£10.2 billion) last year. Urban complained the key issues were 'uncertain background conditions in Germany, and the risk of terrorism in Europe'.
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