Jan 6, 2014
New Karstadt CEO in rush to stem losses at German chain
Jan 6, 2014
COLOGNE, Germany - Struggling German retailer Karstadt needs to do more to mesh its online offering with its chain of department stores as the group fights to return to profitability, its incoming chief executive said in an interview.
Eva-Lotta Sjostedt, a Swede who started her career as a fashion designer and was previously deputy global retail manager at home wares group IKEA, formally takes over on February 24 but is already busy visiting stores across Germany.
"We have no time to lose. We have to act," Sjostedt told Reuters. "Karstadt is not profitable at the moment and that must change quickly."
Karstadt was rescued from insolvency in 2010 by billionaire businessman Nicolas Berggruen, but German unions and media have accused him of not investing enough in the chain, allowing rival Kaufhof, owned by Metro AG, to steal sales.
The company has been loss-making for years though as a privately-held group has not published any recent figures.
Karstadt and Kaufhof, together with more than 200 outlets, are two of Germany's best-known retailers. Speculation has swirled about a possible merger of the rival chains after Berggruen sold majority stakes in Karstadt's premium and sports divisions.
Sjostedt, 47, a mother of three who has already moved to the company's home town of Essen ahead of her family, said she had already spoken to Berggruen but her focus was on improving the performance of the business.
Sjostedt, who previously worked in Japan for Ikea, will be drawing on her experience in combining online and store business at the world's largest furniture retailer.
"We need to link the store business much more strongly with our online activities. We are still far from where we should be here," she said in an interview at a Karstadt store in central Cologne, where she was helping out as a cashier in the cosmetics department to give her a feel for the company and its clientele.
The IKEA group, which owns most of the 345 IKEA stores worldwide, was initially slow to embrace e-commerce, but is now speeding up its online expansion and eventually expects 10 percent of German sales to come via its website.
In Britain, where online shopping has developed faster than in Germany, department stores group John Lewis JLP.UL has boomed on the back of its early moves to mesh its store and e-commerce offerings, while rival Debenhams, which has a weaker online presence, has fallen behind.
Karstadt's previous CEO Andrew Jennings stepped down at the end of December after just two years in the job. Germans unions said the Briton, who spoke little German, lacked experience of the fiercely competitive German market.
Sjostedt, who has already spent hours at a language school to learn German, said she wants to build on the local character of individual stores and focus on areas that are performing well such as lingerie, while reviewing others.
"We need a stronger focus on the needs of customers. Karstadt is much more than fashion. I see here in Cologne that things like stockings and confectionery are selling well. We need more examples like that," she said.
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