Consumer concern hits KardstadtQuelle sales
Full year profit forecasts reduced
German retail group KarstadtQuelle says publicity over its restructuring programme has worried customers and hit sales.
The department store to mail order group, which last month announced a series of store closures and job cuts, said that third quarter sales decreased by 5.9 per cent to €3.2 bn.
Karstadquelle said that speculation about the scale of the job cuts in the run-up to the announcement attracted widespread attention from the general public.
The group “noted as a negative side effect a reluctance to buy due to customer unease”. This particularly affected the Quelle mail order business.
KarstadtQuelle said its sales perfomance across the quarter “remains unsatisfactory, but was within our moderate expectations.” Across the first nine months of the year total sales were €10.1bn, down 6 per cent.
As a result, the group has reduced its full year sales forecast, now expecting a 7 per cent decline on 2003. It had previously forecast a decline of 4 to 5 per cent.
KarstadQuelle said: “In the management’s estimation the sales decrease at the beginning of the fourth quarter was an understandable, but temporary reaction by customers.”
