“Galeria Kaufhof Karstadt will be profitable again by 2021”

Galeria Kaufhof Karstadt, the company that resulted from the merger between German department store chains Karstadt and Galeria Kaufhof, should become profitable again by 2021. This could be achieved without closing any stores, CEO Stephan Fanderl hopes.

Possible without closures?

By the end of September, the merger between Galeria Kaufhof and Karstadt should be fully operational and the merger company should be fully integrated – including a unified head office, IT system, logistics and one online store, Fanderl said in an interview with the Frankfurter Allgemeine Zeitung. “This year we will create the conditions for a successful merger”, he said, adding he hopes to make the loss-making department store group profitable again by financial year 2020/21, even without closing any stores. The synergy gains alone should be enough to clear the losses at Kaufhof, Fanderl believes.

The CEO still wants to fight for each department store in the group and says he does not see any reason to even consider closures at locations where both concepts can be found close together. Those buildings could be given different, complementary roles, such as a major sports division or outlet.

Nine-digit loss at Galeria Kaufhof

Nevertheless, Fanderl believes the challenges ahead for the German department store chain are major: Kaufhof alone suffered a nine digits loss in January 2018, partly due to weak Christmas sales. Therefore, the manager emphasises that Kaufhof and Karstadt are currently being merged “at high speed”.

Strict savings and dismissals are unavoidable, but the number of jobs cut will depend on the further course of the reorganisation, Fanderl claims. The CEO had originally announced the loss of 2600 full-time jobs in January, “but we don’t want to limit the staff any more than necessary,” he said in his latest interview.